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Samsung up in smoke; HTC and Huawei burned

Tuesday, 11 October, 2016

In business schools all over the world, the Samsung Galaxy Note7 case study is guaranteed to be popular. Case studies about the fall of video-rental companies or the rise of low-cost airlines are interesting in their own way, but because so many business students have a smartphone made in Asia, this one is, like, personal.

Fire Today’s press release headline is worthy of study: “Samsung Will Ask All Global Partners to Stop Sales and Exchanges of Galaxy Note7 While Further Investigation Takes Place.” One can almost sense the trust people have in Samsung’s products going up in smoke as that was being typed, and the jokes have started: “Galaxy Note 7 — the smartphone that doubles as a lighter.”

It’s the cover-up that gets you, they say, and it seems all the initial work Samsung did to undo the Note 7 damage has been undone by its ongoing denial that the phone was still dangerous. With its aggressive, can-do culture, this world leader in electronics could not imagine making a disastrous safety mistake… Twice!

Samsung’s nightmare does not automatically mean good news for HTC, however. Google has picked the Taiwanese electronics company to assemble its new Pixel smartphone, but by becoming for Google what Foxconn is to Apple, HTC has lost status. “HTC, You Loser” wrote Bloomberg technology columnist Tim Culpan: “After spending years building its design and engineering chops, HTC has been demoted to water boy. Supplying Google with smartphones isn’t a victory — it’s an embarrassing end to HTC’s decade-long campaign to break out of that contract-manufacturing business and stand on its own two feet.”

The catastrophe at Samsung and the degrading of HTC should work in favour of Huawei Technologies, the Chinese telecommunications giant, but David Ruddock of Android Police pours cold water on that one:

“Google began talks with Huawei to produce its 2016 smartphone portfolio. Google, though, set a hard rule for the partnership: Huawei would be relegated to a manufacturing role, producing phones with Google branding. The Huawei logo and name would be featured nowhere on the devices’ exteriors or in their marketing… According to our source, word spread inside Huawei quickly that global CEO Richard Yu himself ended negotiations with Google right then and there.”

Meanwhile, Apple has brought forward its earnings report for the fourth fiscal quarter (third calendar quarter) of 2016. “Due to a scheduling conflict, Apple’s conference call to discuss fourth fiscal quarter results has been moved to Tuesday, October 25,” the company announced yesterday. It’s not clear what the conflict is, but there’s no smoke without fire. Also yesterday, Apple’s share price bounced 1.75 percent, hitting an intraday high of $116.75, the highest level since 10 December 2015.


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