our supply [for the Note 7]. Curved displays, batteries, you name it.”
Executives made things worse by repeatedly changing their minds on
specifications and schedules. One supplier admitted to Bloomberg it was
struggling to keep up.
“The pressure was huge,” a Samsung Electronics mobile phone
manager, who was directly involved in the orders from suppliers, told me.
“It was a rush. It was chaos.”
After months of whip cracking, Samsung’s managers got their hands
on an early version of the finished Galaxy Note 7 and gushed in
amazement. The stylus pen, the screen, the battery—the phone was a work
of art. They sent off models to carriers for testing, and the carriers found
no flaws. After a brief delay for quality testing, the Galaxy Note 7 was
declared good to go. This was Samsung’s greatest strength: its ability to
manufacture superior hardware, faster than any of its competitors, through
its vast, strict, top-down management system and its superior supply chain.
“We faced skeptics who doubted us,” D.J. proclaimed at the product
unveiling, giving a victory speech in New York City on August 3, 2016.
“We heard from critics who dismissed the large screen and our new S Pen.
But we stayed true to our vision and we persevered.”
Others weren’t so smitten.
“You know the kind of reality-warping bubbles those guys live in,” an
exhausted Samsung marketer explained to me.
It was a dig at Samsung’s military-like hierarchy, a characteristic
shared by many South Korean companies. Untouchable “generals”
charged headlong into each new project, and even when things looked iffy,
the field troops were expected to praise them to the skies, convincing
themselves of their company’s and leaders’ greatness. The marketing team
member who spoke with me was a non-Korean. He had more leeway to
speak freely, as he could always get a job elsewhere with a company back
in the States. A Korean at Samsung, I knew, wouldn’t have been so blunt,
for fear of retribution. A handful of employers dominated the job market in
South Korea, and the companies were notorious for holding grudges.
The Galaxy hit the shelves on August 19, 2016, to surging demand. It
put so much pressure on the supply chain that Samsung had to push back
launches in Russia and Malaysia. But there were no signs of trouble; the
company’s stock price was hitting record highs, and the product reviews
were sparkling.