Don't Miss

[YAHOO] Samsung’s US division was so successful that Korean bosses investigated and humiliated them

March 2, 2015

Attendees gather outside the Samsung booth, featuring its new SUHD TV, at the International CES Tuesday, Jan. 6, 2015, in Las Vegas. (AP Photo/Jae C. Hong)

[YAHOO NEWS]

Driven by huge smartphone sales and clever marketing, Samsung’s mobile division enjoyed a spectacular two-year run from the end of 2011 through 2013.

But things changed last year.

The company’s profits started tanking, which it blamed on increased competition from other smartphone makers. Most people blame Xiaomi, the Chinese startup that sells really nice phones at half the cost of Samsung’s best phones. Xiaomi was the top smartphone vendor in China last year.

As I wrote in my story on Samsung’s rise and fall, the company was shortsighted about the market and got caught by surprise once other Android phone makers started catching up.

However, that wasn’t the only problem. A lot of Samsung’s success was due to the “Next Big Thing” campaign that started at the end of 2011. (You know, those commercials that made fun of Apple fans waiting in line for the iPhone.) It was so successful that Samsung’s brand perception switched seemingly overnight. Suddenly, Samsung’s phones were in the same conversation as the iPhone.

Not everyone in the company saw it that way. Executives at Samsung’s Korean headquarters didn’t see it that way. In 2012, they flew auditors to Samsung’s offices in Dallas for an unannounced audit that lasted three weeks.

[READ MORE]