Right now, Samsung is the top seller of TVs and smartphones worldwide and number two in tablets, but top executives are worried about an ever-growing number of low-cost competitors, according to Mark Milian at Bloomberg.
Milian says Samsung executives met in December to talk about the coming onslaught of low-cost Chinese Android phone makers. (We saw a lot of these companies in February.)
Jenny Lee, of investment firm GGV Capital, told Milian, “Where they are today is great, but they’re paranoid.”
They’re on edge because Samsung owes much of its success to a strategy called “fast following,” which it may have finally outgrown. The idea of fast following is that a company, like Samsung, masters every part of hardware development so that when a competitor releases a product that strikes a chord with consumers, it can catch up with its own product quickly, and sometimes more successfully.
Now, however, Samsung finds itself leading the pack — it has already released its first Galaxy Gear smartwatch and has new models launching this spring, while Apple still hasn’t released a product. The objective now for Samsung is to build its reputation for innovation and shed its copycat image, lest it be overtaken by other small manufacturers using the “fast follow” strategy to make cheaper products.
Bloomberg reports that Samsung chairman Lee Kun Hee gave a speech to employees last year urging a bigger push for innovations, so that the company can continue to lead industry trends. If Apple ends up releasing a bigger-screened iPhone last this year, it will be a victory of sorts for Samsung, which popularised the phablet.
“Samsung is the 800-pound gorilla that works harder than a startup,” former Samsung employee Jay Eum, told Bloomberg. “Because they’re in a leadership position, they have to evolve. They realise that now, especially in the last two or three years, they don’t really have a roadmap to follow.”