Samsung Electronics today is the world’s top vendor of handsets (including smartphones) in terms of shipment.
Chairman Lee Kun-hee, who passed away on Sunday, is considered the leader that made this happen.
Samsung Electronics launched its first handset in 1988, the first South Korean company to do so. At the time, the handset market was dominated by Motorola. At the time, Lee said that an era where one person will own at least one wireless handset is coming. He stressed the importance of the phone business, designating a future growth engine for Samsung Electronics.
Samsung focused on expanding its production rate to catch up to Motorola. At the time, most South Korean companies focused on quantity over quality. Samsung’s defect rate for handsets was at one time as high as 11.8%. One out of ten handsets bought by consumers will be defective. But the mindset that “quality was best” was difficult to change.
On March 9, 1995, Lee ordered all the handsets old in the market to be recalled at burned at the factory where they were produced in front of employees. This event is now called “Anycall Burning”. Around 2,000 employees, wearing headbands with “Quality First” written on them, used hammers to destroy the 150,000 units of phones that were collected and proceeded to burn them. Over 50 billion won worth of handsets were destroyed.
Samsung shifted radically to quality from then on. Lee said that if Samsung become the world’s top handset company, its profit would grow three to five times of what they were making at the time. He said to eliminate the defect rate __ he was willing to close the company for a year to achieve this.
Samsung’s Galaxy smartphone series is today the top Android smartphone. Lee undeniably soughed the seeds to this.