[THE INVESTOR] Editor’s note: Samsung Electronics on Aug. 23 unveiled its bigger-screen flagship phone Galaxy Note 8, the successor of the ill-fated Note 7 whose sales were suspended right after the launch last year due to fire-prone batteries.
Some critics said the Korean tech giant could ditch the Note brand as it failed to regain trust from customers. But at the unveiling event of the new phone in New York, Samsung’s mobile chief Koh Dong-jin who was directly involved in the Note’s development from the beginning, ruled it out, renewing commitment to the brand.
“I have been frequently asked about the possibility of abandoning the brand. But we cannot give up on a brand that has been nurtured for years and has loyal customers,” he said.
“Some of our rivals were initially skeptical about the bigger-screen concept, but now they are following us with their own phablet models. We will continue to lead the segment.”
Samsung unveiled the Note phone earlier than usual in a way to defend its flagship phone sales, including those for the S8, before the pending debut of its archrival Apple's new iPhone. The Note 8 is expected to hit the market on Sept. 15.
Below are the key Q&As with Koh on the Note 8 launch and Samsung’s mobile strategy overall.
Q: Why did you mention about the Note 7 during the unpack event?
A: The Note 8 is the successor of the recalled Note 7. I didn’t want to cover up what we did wrong. We made all-out efforts to find the cause and fix it. I checked the whole process of testing 200,000 phones and 30,000 batteries every day for 100 days. We found faulty batteries as the cause of explosion. We also launched the Note Fan Edition. It was not about money, but about proving the recall decision was due to batteries, not other defects.
Q: What is your response to critics who say that Note 8 lacks “wow” features?
A: Customer demands are diverse. Some always want new features, while others want a phone that can be used for two to three years. We are not sticking to innovation itself. We will seek innovation that can be truly embraced by customers. The Note 8 has also been upgraded based on customer surveys.
Q: The Note 8 comes with a smaller battery compared to the Note 7. Do you plan to stop increasing the battery capacity due to safety issues?
A: There are some reasons why we can reduce the battery capacity. One of them is the 10-nanometer processor that has enhanced the phone’s power efficiency by 30 percent. Users are also allowed to adjust their battery use based on their smartphone use patterns, which increases battery efficiency overall. Now I can guarantee battery safety. The phone will maintain more than 95 percent of battery capacity even after two years of use.
Q: What is your sales target?
A: The Note 5 sold 11 million units. I think the Note 8 would sell more than that. But the shipments could be adjusted because we still want to sell more Galaxy S8 phones. (Samsung aims for 48 million unit sales of the S8. Koh hinted the phone has thus far sold about 15 percent more than its predecessor S7.)
Journalists check out the Note 8 at the unveiling event in New York.
Q: What’s your strategy for the Chinese market?
A: We replaced the Chinese business chief early this year. It was a big decision for us. After that, we have streamlined the contribution structure, hiring more local retailers. China is a crucial market but we will not hurry. We are making sincere efforts to regain trust from customers there.
Q: When is the Chinese launch of Bixby?
A: We have completed almost 90 percent of the Chinese version. It will connect more devices like TVs beyond phones.
By Lee Ji-yoon (firstname.lastname@example.org)