Our “Reputation Risk or Ruin?” column uses Talkwalker’s AI media analysis tools to study the depth and extent of media coverage of crises in current events.
Reputation Risk or Ruin?
Samsung’s most recent crisis is a failure to learn from past mistakes. Back in 2016, its Galaxy Note 7 had a very splashy launch, but then turned out to catch fire at inconvenient times, i.e., on airplanes. (As a result every airline passenger used to hear—and occasionally still does—dire warnings from flight attendants about the dangers of carrying a Samsung phone on the plane.) After the Note 7 recall, Bloomberg revealed that the source of the design disaster was Samsung’s rush to capitalize on reports that arch-rival Apple’s new phone wasn’t anything very “new.”
Just last month Samsung began shipping its highly anticipated Fold phone to influencers and journalists for review. It anticipated glowing reports, but exactly the opposite happened. Many of the units failed quickly, which of course reviewers described online in vivid detail.
This time Samsung’s misstep was driven by much-anticipated foldable phone announcements by rivals Huawei, LG, and Motorola. And this time the outcome was just as disastrous.
One of the most basic tenets of crisis communications coverage is that no matter what you’ve done wrong in the past or how well you fixed the problem, your past misdeed(s) will always be brought up whenever the next crisis—or even minor headache—befalls you. So it was no surprise to journalists that once again Samsung had rushed a product to market, and once again failed. After dozens of negative YouTube videos and other reviews had been shared by millions around the globe, Samsung announced that it would indefinitely delay the official launch of the Fold.
Then Samsung compounded the problem. A reviewer on Ifixit.org wrote:
“Why make a device with a fragile OLED layer, so little tolerance between screen and spine, and so many ways for dirt and moisture to get in? Hubris? Testing with robots instead of real humans, with pockets and fingers and different ways of opening and closing things? These are questions that may go unanswered, even if we learn the cause of the defects.”
iFixit specializes in taking phones apart to determine their ability to be repaired (as opposed to replaced and recycled). Samsung pressured iFixit to take down its video that showed where the Fold’s flaws were, and iFixit did. As a result, just as the negative press was beginning to subside, social media exploded with further hostility toward Samsung.
Then, as if that weren’t enough, Samsung’s recently released Tab 5Se tablet was found to have a wifi problem. Apparently, if you hold it in a certain way you are suddenly disconnected. And thus launched another round of negative reviews and social hostility.
Judging from the length and depth of the red in the chart below, it’s clear that Samsung has yet to learn the basic lesson of tech PR: if you prioritize a PR win over getting the technology to work, you will lose. In this case about 60% of its profits.
Samsung’s emphasis on PR around announcing products means that the PR department is driving the development schedule, instead of the other way around. When I worked for Lotus and HP there was always tension when we were getting ready in time for a cover story or a major launch we could own. And, yes, we pushed everything to the edge to meet those deadlines. But ultimately it was the product engineers, and to a lesser extent the product managers, who set the schedule, not the corporate PR department. So we launched when products were ready, not when PR or the media thought we should be.
This is a crisis that has both investors and reviewers questioning the culture of Samsung. ∞