Samsung has taken the bull by the horns by launching a booster global mobile phones. But the impact of the case of batteries explosive on a group challenged by the intensified competition and in full generational transition is still unknown.
The challenge for the world’s leading manufacturer of smartphones is to avoid a total disaster that would cost probably billions of dollars, would ruin his reputation and put its governance in the balance.
images of phones blacked out on the web
on September 9, The giant south Korean company has asked its customers to bring in 2.5 million copies of what was supposed to be a flagship product, because of faulty batteries that have literally charred some devices. The Galaxy Note 7, a “phablet” -a device halfway between the smartphone and the tablet – was released three weeks before, in anticipation, to play the big rival Apple.
images of phones, blackened have flooded social networks and Samsung has admitted a default on the batteries. Humiliation supreme for a group that wants to be the champion of innovation and quality. “Samsung seems to be gone too soon for going out in the Note 7, with the iPhone 7 in mind, and it is now paying an invoice salt”, judge Greg Roh, analyst at HMC Investment & Securities in Seoul.
Samsung caught between Apple and the Chinese
The south Korean was counting on this model to sustain its growth up to the end of the year in an extremely competitive market. The crisis could not have come at a worse time. After the boom years of 2012-2013, Samsung has found itself caught in a vice between the Apple to the top of the basket and chinese competitors in respect of the low range.
Despite all this, the company has recorded its best operating profit in two years in the second quarter, thanks to the popularity of its high-end phones. The Note 7 is expected to continue the momentum. The recall underway in 10 countries would cost Samsung to three billion dollars. And financial results could also be adversely affected for months, judge Greg Roh. Since the end of August, the market value of Samsung has shrunk by $ 15 billion.
A generational transition controversial
This crisis comes at a critical time for a group embedded in a generational transition controversial and observed with attention. Since a heart attack in 2014, the patriarch Lee Kun-Hee is confined to bed. J. Y. Lee, his son, 48-year-old, is widely regarded as his heir likely to the head of Samsung Electronics and the parent company, Samsung Group. J. Y. Lee was appointed two weeks ago to the board of directors of Samsung Electronics, of which he is the vice-president.
If Lee Kun-Hee is widely credited with having transformed the company into the leader of planetary, her son, very discreet in his rise to power, has everything to prove. “All eyes are on him. The case of the recall could be a crucial test for him,” said Wi Pyoung Ryang, an analyst at the Institute for the reform of the economic research, Seoul.
lack of transparency
The ruling family has often been criticized for the complex web of cross-shareholdings through which it controls the giant, it does, in fact, only 5% of the capital, and a lack of transparency. “It is a difficult time and crucial to Samsung and its new leader will have bread on the board”, said Wi Pyoung Ryang.
The callback operation might drag on, and it is not yet known the impact of the crisis on the group, recognizes Lee Seung-Woo, analyst at IBK Investment & Securities. Samsung has begun distributing the new Note 7.
delayed delivery of the new model
A half-million american consumers have already exchanged their devices are defective, as is the half of 420.000 South Korean who had bought one. But some have complained of delays in the delivery of the new phone.
The biggest concern for Samsung, judge Linda Sui, analyst at Strategy Analytics, what are the long-term damage on its image. “In addition to the material losses, turnover and profitability, the potential damage to brand image and consumer confidence are even worse, and more difficult to address in the short term,” she said. The crisis could last until the group is launching next year a new product.
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