Samsung’s leadership vacuum may change the game or not!

WITH the flurry of accusations that weighed on Samsung Electronics and the sensational jailing of the boss of one of the world’s biggest conglomerate’s, things are about to heat up on the mobile horizon.

This may give Apple an edge but the Cupertino-based tech giant is surely hoping that it could bank on the leadership vacuum at Samsung to run over the South Korean giant.

The battle between the two global entities took shape with Samsung’s challenge to Apple’s domination in the smartphone segment.

But it took a nasty turn when Samsung had to retrieve and totally eliminate its flagship Note 7 from its sales force, leaving a dent in its competition against the iPhone range of products.

While Apple was missing out on the cheaper range of phones — it failed to push the iPhone 5s against the cheaper Samsung models — the South Korean company had its limitations too.

Samsung was largely missing out what could be the most important aspects of the mobile business: that is apps and online services.

It will take some time for the mobile maker to reach the level of Apple, but in the mobile industry, a quarter can be too long although Apple is still making strides in this aspect of the business.

But the jailing of Samsung Electronics vice chairman Lee Jae-yong could be a game changer in the mobile industry’s constant battle to better the each other.

Despite the South Koreans playing down the importance of the jailing, and some leniency is expected in the appeal process, this event may impact on the company’s mobile entity.

At some point, Samsung’s boss decided to rush the Note 7 ahead of the iPhone 7, but when it backfired — literally exploding — and sparking viral memes on social media, sketchy reports of the timeline to get Note 7 to the market before Apple showed how things went bad.

It was a question of leadership failure right at the top of the organisation with reports on how the mobile division was pushed to the brink, and how quality control was rushed in order to beat Apple to the game.

The orders, it is said, came from the big boss and if it is true, it would show the limitations of Samsung’s leadership structure, where a powerful owner can brush aside the rest of the board members to impose his will.

This came at a time when Samsung was losing ground to cheaper brands like Huawei and others.

The disaster was amplified with the Note 7 recall that was replaced by another version that again, backfired when they caught fire too.

In this long-running battles of the tech giant’s between Apple and Samsung, it has always been about the showing-off which technology and which end-products are better.

This could see an ugly ending for Samsung in its tech-price-configuration war against Apple, but analysts are cautious on Apple’s chances.

What has happened to Lee Jae-yong is a terrible adventure, one that would not be wished on any young and dynamic corporate leader, but there is a price to pay for every wrong move made.

And in South Korea, the case became a matter of national pride and justice, in which the right punishment had to be meted against the accused.

Samsung remains one of Asia’s largest conglomerate and it was running with a “business-as-usual” tag in the backdrop while the case against its de-facto leader was ongoing.

The latter was jailed since February and was on trial for charges ranging from embezzlement to perjury, in a scandal that gripped the country for months.

The ouster of former president Park Geun-hye is tied to the case in many ways, as it is the bribing of Park that triggered the downfall of Samsung’s de-facto boss.

But the Samsung boss — before the judgment — fought back tears and denied wrongdoing.

While analysts and economists are certain the case will spark reforms in the country’s giant conglomerates, forcing them to loosen their grip on the economy, the push will keep Samsung busy.

The company will probably be forced to deal with any transformation plans that will be rolled out by the authorities — plans that will be devised to curtail the conglomerate’s financial influence over the political system.

This will mean putting more resources in non-profit driven enterprises that may set the company back in the competitive marketplace.

Will Apple press forward on the double embarrassment the South Korean company has suffered or will it falter with product choices that initially gave Samsung an edge in capturing more market share?

The September release of the new Apple products with the latest software upgrades could indeed spark a rally for the American mobile maker or it could simply be business as usual for world’s most expensive conglomerate?

Kazi Mahmood is Malay Mail business news editor. This article first appeared in Malay Mail Money print version!

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