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Two-horse race
Even with the successful launch of the Galaxy S, Samsung was still behind Android rivals like HTC.
Both companies were making decent phones, but neither gave customers a good reason to choose
one over the other. As Samsung prepared to launch its successor to the Galaxy S, the Galaxy S II,
in the spring of 2011, it also formulated a new strategy to market the device, at least in the US.
According to sources familiar with the companys thinking at the time, Samsungs Korean executives
wanted Galaxy to be the number-one smartphone brand within five years. (It ranked fifth in
consumer surveys at the time.)
Under the US head of marketing Todd Pendleton and his team, Samsung was able to do it in 18
months.
At first, the Korean leadership at Samsung wanted to pick off the competition one at a time, starting
with HTC, then Motorola, then BlackBerry, and finally, Apple. But the US team decided on a different
approach. It was going to start a war with Apple, kicking off the smartphone worlds equivalent of
Coke versus Pepsi.
It was a gamble. By attacking Apple directly, Samsung risked looking petty and desperate.
But The Next Big Thing campaign, which was developed by the ad agency 72 And Sunny, was a
massive hit. For the first time since the launch of the iPhone, someone had created the believable
perception that there was something better out there.
Out-innovating Apple
With the launch of The Next Big Thing campaign came a lot of glowing press coverage for
Samsung. There was a company out there willing to take swipes at the king of smartphones, and
consumers were responding.
And for all the criticism Samsung got along the way for copying Apple, it did prove that the world was
hungry for something the iPhone didnt have yet smartphones with giant screens.
In the fall of 2011, Samsung announced the Galaxy Note, the first so-called phablet with a 5.3-inch
display. (The iPhone 4S only had a 3.5-inch screen.) Compared to most phones at the time, the
Galaxy Note appeared absolutely massive. When it launched in February 2013, critics blasted the
Note for being too large. The Wall Street Journals Walt Mossberg, one of the most famous tech
reviewers in the world, compared using the Note to holding a piece of toast against your ear.
image: https://static-ssl.businessinsider.com/image/54ef75f069bedd445a86bcd5-1200-
924/samsung-galaxy-note-3-5.jpg
AP
Samsungs Galaxy Note created the phablet market.
The initial reception was so bad at first, sources say some US carriers almost didnt want to sell the
Galaxy Note II the following year.
But the phone sold well outside the US, especially in Asia, and eventually Samsung was able to
prove there was a market for phablets. Samsungs phones kept getting bigger and better screens,
while iPhone users were stuck with tiny devices.
A real narrative began to emerge in the press: Apple was in trouble if it didnt catch up with Samsung
and start offering phones with bigger screens. Many asked if Apple had lost its knack for innovation
following the death of Steve Jobs, and Samsung was doing a really good job at making that theory
seem plausible. Apples stock dropped as low as about $380 from its all-time high of about $705,
largely on fears that Apple didnt have a revolutionary new product up its sleeves.
Meanwhile, Samsung continued to climb. Sources familiar with Samsungs sales at the time said its
marketing of the Galaxy S line of phones had residual effects and boosted sales of Samsungs other
products like washing machines and refrigerators. In fact, the US team was outperforming
Samsungs headquarters in Sourh Korea, and other international offices were itching to adopt The
Next Big Thing in their respective countries.
The Next Big Thing campaign was clearly a success.
Unfortunately, not everyone at Samsung saw it that way.
Missed opportunity
The success of Samsungs Mobile in the US began a rift with the Korean headquarters. Sources say
the more successful Samsung was in the US, the more complicated the relationship with
headquarters got. Instead of getting credit, the US team felt they were being chastised for doing their
jobs well. (Samsung declined to comment on this story.)
It got so bad, a source told us, that Samsung flew a plane full of executives to the mobile divisions
office in Dallas for an unannounced audit that lasted three weeks in 2012. The Dallas-based
employees had to go through all materials they used to sell and market Samsungs mobile products.
They were accused of falsifying sales, bribing the media, and a bunch of other damaging actions
that hurt morale in the office. The same US-based office that helped turn Samsung into a brand as
recognizable as Apple was suddenly being punished for its work.
After three weeks, the Korean auditors found nothing wrong with the way the US office had been
operating and went home. But the damage had been done, and the perception remained at the
Korean headquarters that despite its success, the US team was up to no good.
In fact, during one meeting with the global teams at Samsungs headquarters in Korea, executives
made the US team stand up in front of several hundred of their peers in an auditorium. The
executives told the employees to clap for the US team as encouragement since they were the only
group failing the company, even though it was clear to everyone the opposite was true.
That all but killed any hope of translating what the US team pulled off to other regions. They were
able to continue in North America, but Samsungs global messaging remained disjointed.
It all culminated in 2013 when Samsung introduced the Galaxy S4 at an over-the-top event at Radio
City Music Hall in New York. Instead of the traditional product announcement, Samsung put on a
Broadway-style musical that incorporated features of the new phone.
It was weird, one of those things you had to see to believe. And a lot of people criticized Samsung
for putting on a show that seemed to objectify women. CNETs Molly Wood called the event tone-
deaf and shockingly sexist.
image: https://static-ssl.businessinsider.com/image/54ef76b36da811755ef0c019-910-454/samsung-
unpacked-event-92-1.jpg
Screenshot
Samsungs Galaxy S4 event was criticized for objectifying women.
Aside from the awkward unveiling, the Galaxy S4 also launched to mostly negative reviews.
Samsung packed a ton of features into the phone like touch-free controls, eye tracking, and a whole
suite of camera modes that were either unnecessary or didnt work as advertised. Still, the phone
was Samsungs most successful ever, and 2013 was another very good year for the company.
But 2014 was going to be a wakeup call.
Even Samsung's top marketing executives like Younghee Lee admit it wasn't
long ago that consumers thought of the company as "boring and monotonous,"
a geeked-out marketer working with a little-known ad agency affiliate in an
electronics world transformed by sexy brands like Apple. Fast-forward to June
25, almost two decades after she joined the Korean electronics giant, and it
will be Leea stylish, former L'Oral and Lancme exec who now runs
Samsung's mobile businessnot its engineers to accept Samsung's honors as
the Cannes Lions' Creative Marketer of the Year.
With good reason, too. Last year, Samsung took home 27 Lions, contributing
to an overall historical total of 74 awards (more than any marketer in the last
five years) at a marketing organization being transformed by top nontech
practitioners and creative powerhouses including Bartle Bogle Hegarty and
Wieden + Kennedy. Those shops were recently added to roster agencies like
Leo Burnett, 72andSunny and Cheil Worldwide. Lee, evp, global marketing,
mobile communications business, recently spoke with Adweek about the
changes underway at a company that has not only toppled Apple as the
dominant mobile handset brand, but is also now challenging consumers to use
their phones with new connected devices like refrigerators and software
services. Here's an edited transcript:
For me, Samsung Galaxy S7's Unpacked was the monumental event of the year.
Unpacked has been Samsung's unique product launching platform since 2008
where we bring together around 5,000 global media, clients and partners to
provide an exciting new-product experience. This year's event at Mobile World
Congress was an especially exciting one with our Gear VRs providing a virtual
reality product introduction as Mark Zuckerberg walked onto the stage for his
surprise speech with D.J. Koh, Samsung mobile chief. It was probably the
biggest "wow" moment in the entire tech industry this year.
Our "Happy New Gear" campaign was themed around the holiday period and
aimed to send the biggest holiday card ever using the Samsung Gear S2. You
can see the bold, playful, conversational and inviting visual expressions in a
series of massive digital out-of-home displays.
On the premium end, Samsung has always done battle with Apple.
Now there's increasing pressure from lower-end manufacturers
like Huawei, Xiaomi, OPPO and Vivo. How will you compete with
them going forward?
The mobile industry has been very dynamic for the past few decades. Being a
leader now does not mean that you can sustain that leadership forever.
Samsung knows that very well, and that's why we keep our mindset very
humble and relentlessly pursue better technology, superior marketing
campaigns and more efficient global operations. I respect the brands you
mentioned, their commitment and efforts to enter into the global market from
several local success stories. We will focus on providing better value to our
consumers, the way we have always been successful. We are always ready
and very confident to win.
This story first appeared in the June 13, 2016 issue of Adweek magazine.
As Android has grown, Samsung has come to completely dominate it. The South
Korean manufacturer sold more mobile phones than any other company in 2012,
accounting for 22 percent of the market, according to Gartner. Knowing that
Android claimed around 70 percent of the worldwide smartphone market in 2012
and IDC research suggests that Samsung was responsible for 42 percent of all
Android smartphone shipments during the year. Samsung is the most popular
Android phone maker, by far.
This success is entirely built on Samsungs Galaxy brand which has encompassed
over 50 separate devices, if you count all the smartphone variants, phablets, and
tablets released so far. Samsung has bombarded every niche, every price point,
every form factor, every carrier, and every country it can possibly reach.
When the Samsung i7500, also known as the Samsung Galaxy, was released in
June 2009, it marked Samsungs entry into the Android smartphone market. The first
Android smartphone, the HTC Dream (or T-Mobile G1), had been released the
previous year and the all-conquering Motorola Droid was to land just a couple of
months later. Few would have predicted Samsungs climb to dominance back
then. Fast forward to the present day and Samsung is riding high as excitement
builds ahead of the release of its newest flagship, the Galaxy S4, which is expected
to be the next in line for the Android throne, and could even outsell the iPhone, if its
lucky.
The S stands for success
Throughout Samsungs assault on the smartphone market, the company has always
been careful to distinguish its flagship line with the letter S.
The original Samsung Galaxy S was released in the summer of 2010 and it has sold
over 24 million units worldwide. As a high-end, premium Android smartphone, it
packed a 1GHz processor, 512MB of RAM, a 4-inch display, and a 5-megapixel
camera. The reception was good and it was widely considered as credible
competition for the HTC Desire and the iPhone 4. It was released on all of the major
U.S. carriers and Samsung created a special version for each of them and
differentiated them with the Epic 4G, Vibrant, Captivate, Fascinate, and Mesmerize
names.
A few budget Galaxy offshoots aimed at various markets around the world followed,
and the year ended with a bang as the pure Android Nexus S, co-developed with
Google, launched in time for Christmas, but in 2011 Samsung was to enjoy even
greater success. Hardly a month passed in 2011 without a new Galaxy smartphone
the Ace, the Fit, the Gio, the Mini, but it was the Galaxy S2 that was to secure
Samsungs place at the top of the Android tree. Slim, powerful, and hugely desirable,
the S2 launched in more than 120 countries in the summer of 2011.
Youd be forgiven for feeling a sense of deja-vu as Samsung saw out 2011 with a
laundry list of Galaxy models including the R, the W, the Y, the XCover, the
Stratosphere, and most notably the Galaxy Nexus. The pattern continued in 2012
with the Ace Plus, the Beam, the Pocket, and then in the summer Samsungs
greatest success so far.
The Galaxy S3 boasted a 1.4GHz quad-core processor (1.5 GHz dual-core in some
markets), 1GB or 2GB of RAM, a 4.8-inch display with a 720p resolution, and an 8-
megapixel camera. It proved to be the fastest-selling Android smartphone to date
and Samsung has sold over 40 million S3 handsets in 145 countries so far, meaning
its selling at roughly double the rate of its predecessor.
For the rest of 2012 Samsung continued to pump out a huge number of Galaxy
devices from the Stellar, to the Reverb, to the Rugby Pro. Samsung even released a
camera under the Galaxy brand. This year has started in much the same way as the
hype grows deafening in the buildup to the release of Samsungs next flagship, the
Galaxy S4, which is expected to outsell its predecessors.
Samsung hasnt confined the Galaxy brand to smartphones; it has also released the
Galaxy Tab range of Android tablets and the Galaxy Note smartphone/tablet hybrids.
The first Galaxy Note was a surprise success and sold over 10 million units since its
release at the end of 2011. It combined powerful specs with a 5.3-inch display and a
special stylus with unique functionality and related software, known as the S-Pen. Its
successor, the Galaxy Note 2, upped the display to 5.55 inches and is arguably
Samsungs current flagship packing a 1.6GHz quad-core processor, 720p resolution
display, 2GB of RAM, and storage capacity up to 128GB (if you use a microSD). It
was released at the end of September 2012 and sold 5 million units in the first two
months.
When it comes to tablets, Samsungs success has apparently been more modest.
The range includes releases at various sizes from the 7-inch display of the Galaxy
Tab 7.0 through 7.7 and 8.9 to 10.1. The Galaxy Note 10.1 is its biggest and best
tablet so far and it combines the S-Pen from the smaller Note models with a large
form factor traditional tablet. None of these tablets have come to rival the iPad, or
even Amazons Kindle Fire, which remains the most popular Android tablet.
Samsung History
Unlike other electronic companies Samsung origins were not
involving electronics but other products.