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DJ Koh did not look nervous. Instead, he was considering me with a wide, confident grin, like he knew the punchline to a particularly good joke.
Yet what Koh, and Samsung, the company where he serves as President of its mobile communications business, have endured — and by some measures come through the other side, —was no joke.
A year ago, one of the technology giant’s biggest product releases, the Samsung Galaxy Note 7, was up-ended and ultimately capsized by a handful of exploding batteries and a months-long investigation, conducted in part by Koh himself, into what happened and how it could be prevented for future smartphone releases.
Under Koh’s guidance, the company executed a remarkable turnaround first with the promise of some of the most rigorous battery production and testing regime in the business, and, in the spring, with the launch of the Samsung Galaxy S8 and S8 +, two excellent handsets that, at least for a time, helped everyone forget the brief period when Samsung’s name was synonymous with “exploding battery.”
And yet, just 48 hours before the Samsung Galaxy Note 8 launch, the nail-biting rebirth of a vaunted handset brand, I’m surprised to find Koh and Samsung Electronics North America President and CEO Tim Baxter so relaxed and self-assured when we sit down in Samsung’s New York City corporate offices.
Samsung will be watching the Note 8 launch very closely, including on social media.
When I ask if there are special preparations for the months following the Note 8 launch — maybe a crash response team — and if, Koh will be gripping the desk so hard during those first weeks that he leaves indents on his executive desktop, it’s Baxter who responds and makes it clear that they’re prepared for anything.
“When we launched the Galaxy S8. I would say that was a heavily watched launch given what transpired from there and, through the learnings of what we went through on the Note 7, we also implemented some processes here. For instance, we put a forensic lab in Dallas that allows us, if there’s a device [issue], we can get it and test it and x-ray it immediately,” he explains.
Baxter adds that Samsung will be watching the Note 8 launch very closely, including on social media. However, he also had an explanation for the apparent confidence.
“The preparation that we implemented during the Galaxy S8 launch and the fact that we we’ve sold and shipped nearly 20 million of the Galaxy S8 without incident, coupled with processes we’ve put in place, leave us very confident about launch of Note 8,” says Baxter.
When I look to Koh for more, his grin broadens and he chuckles. “That’s why I’m quite confident.”
Koh explains how when the Note 7 disaster happened, he worked seven days a week over 100 days to understand how this happened.
What he learned heavily influenced the Galaxy S8 and, instead of making him more cautious, helped germinate a new approach that asked. How can I have lots of features and make it safer? “That’s the reason for the eight-point battery check,” said Koh.
Koh told me he worked with partners and conducted factory-level inspections.
“That’s the reason Tim can say that and I’m smiling,” says Koh.
Samsung’s leadership isn’t just exuding an almost unnerving confidence, they contend that they’ve turned a corner with customers, too.
The temporary loss of the Note line for a few quarters hurt Samsung financially, carving a huge chunk out of its mobile market share, which Baxter says they’ve since recovered. He pointed to Strategic Analytics numbers that put Samsung’s mobile market share at 40% (up, claims Baxter, from a dip to 20%).
“We’ve learned a lot that has enabled us to rebound and recover our brand in a significant manner,” says Baxter.
The Samsung Galaxy S8 and S8+ is, Koh and Baxter agree a significant turning point. “It was probably the most watched launch we’ve ever experienced,” says Baxter. The company is, according to him, selling more S8 devices than even the popular Galaxy S7, another indication that consumers have moved on from Samsung exploding battery concerns.
It is hard to overstate the importance of the Galaxy S8’s smooth launch. “There are several kinds of implications, because, you know, everybody knows what happened last year. That was the only reason the launch of S8 and the success of S8 was crucially important to me,” said Koh.
This success has allowed Samsung, at least, to look past a tough 2016 and focus on successfully launching these two well-received handsets and now, the Note 7, replenishing the line of big-screen smart devices, Samsung has worked nearly a decade to perfect and market.
DJ Koh speaks at the Samsung Galaxy S8 launch.
As we talk, Koh and Baxter are less focused on the risks of reintroducing the Note brand than they are on where the Note 8 fits in the market and Samsung’s handset line.
The device, which gets officially unveiled on Wednesday in Manhattan, is a 6.3-inch Android smartphone with dual 12-megapixel cameras; a versatile, S Pen stylus; water resistance; fingerprint, facial, and iris scanning; and excellent multi-tasking capabilities. The Note 8 picks up where the Note 7 left off, but is also deeply influenced by the S8 line. There’s the “infinity” display that runs the length of the device, no physical home button and a fingerprint sensor on the back.
The update is both iterative and a leapfrog. It takes, for instance, Apple’s Portrait mode photography idea, where you have the choice of taking a portrait shot with an expertly blurred background or not, and hands the user full control of the degree of background blur both during and after you take the shot.
It is also a device that remains true to its roots. Note users are more interested, according to Samsung, in productivity and creativity. To satisfy them, Samsung has improved the S Pen and multi-tasking, letting users store 100 pages on the sleep screen notes and create multi-tasking app pairs that you can launch with a tap.
The product looks solid and there is some comfort in all the checks and balances Koh and company have put in place. There is, though, another threat to Note 8’s chance for success.
Baxter notes repeatedly the massive opportunity for Note 8 (and the rest of Samsung’s handsets), explaining that an unprecedented number of smartphone owners are this fall approaching the end of their upgrade cycles, 50 million by Samsung’s count.
That could be good news, but those same upgrades are available to Apple and every other Android handset manufacturer. In addition to the growing number of available Android handsets, Apple is prepping its biggest iPhone release in a decade, one that could ship or announce at the same time as the Note 8.
I ask Koh if he’s concerned about the competition. Koh tells me that, of course, he monitors them.
“That is just one thing I need to see and monitor. But I want to say, I have my own roadmap,” he says. “I have the technology innovation roadmap up to 2020 already. So, I’m going my own way, based on upon the prefixed idea of my roadmap in terms of the evolution and innovation and everything… but I’m not hesitating, not monitoring and paying attention to how my competitors are doing.”
Tim Baxter, President and CEO of Samsung Electronics North America
Baxter adds that that Samsung’s track record in the increasingly popular phablet space will draw more consumers to them.
“We think it’s an exciting time to bring our choices to the table for consumers to decide in the marketplace,” he said.
Not for the first time during our chat, Koh isn’t fully satisfied with Baxter’s answer.
“Yeah,” he interjects, “but my answer was regarding my competitors and how I’m thinking. I wanted to point out that I’m working based on my own road map.”
Samsung’s done a good job in recapturing U.S. smartphone market share, but I wondered about another key battleground: China. It’s a market that’s vexed Apple as well. After initial strong growth, there have been headwinds as companies like Xioami, Doogee, and OnePlus flood the market with attractive, powerful and, most importantly, affordable handsets.
I wondered if Samsung is struggling there and how the company might combat growing resistance to their pricier devices.
“In the last 2 years, we were facing a lot of difficulties in Chinese market, frankly speaking,” says Koh, who tells me he visits the market every month and has spent the last year overhauling his Chinese operations, from leadership, to sales to distribution.
The work is paying off.
“I already found lot of positive signals in China in the last eight or nine months,” Koh says. “The results of introducing the Galaxy S8 and S8+, we are reasonably increasing the high-end premium market. Mid-range, we’re still struggling. We know how to recover it, so I’m quite positive in 2018.”
Outside China, in Samsung’s home market of South Korea, the news is even better and Koh says anticipation for the Note 8 is high, even without a launch event there.
“In Korea, we didn’t do anything. We just announced, ‘Oh, we’ll have Unpack event in New York on 23rd of August. Customers are visiting carrier shops already, and they are knocking on the door, ‘How can I make order for Note 8?’”
Guess now I know why Koh is smiling.
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