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Note 7 recall humiliating to ‘Republic of Samsung’

EFFICIENT IMITATOR:A ruling ordering the electronics giant to pay Apple for infringing on design patents has helped keep alive the company’s image as a copycat

NY Times News Service, SEOUL

A Samsung Electronics Co Galaxy S7 Edge smartphone sits on display during the release of Apple Inc’s iPhone 7 at KT Corp’s Olleh Square flagship store in Seoul on Friday.

Photo: Bloomberg

Former South Korean teacher Kim Jeong-min was at Tokyo’s Narita International Airport this month when he watched a TV news report that Samsung Electronics Co’s Galaxy Note 7 smartphone was banned on airplanes because it was prone to catching fire.

Kim, 58, said he had felt humiliated, as if the non-South Koreans in the airport lounge were looking at him.

Although he does not own a Galaxy Note 7, his reaction was typical of the intense feelings South Koreans hold toward Samsung, the most dramatic corporate success story to emerge from the country’s transformation from a war-torn agrarian nation to a global economic powerhouse.

“Whether we like it or not, Samsung is to the global market what our national team is in the Olympics,” Kim said.

Calling Samsung the country’s biggest and most profitable company hardly describes its special — but not always favorable — place in minds there.

Some South Koreans say they live in the “republic of Samsung.”

Life can literally begin and end with Samsung: One can be born in a Samsung hospital, attend a Samsung university, honeymoon in a Samsung hotel, stock a Samsung-built apartment with Samsung appliances bought with a Samsung credit card, take children to Samsung amusement parks and have one’s body, upon death, taken to a Samsung funeral center.

For South Koreans, the company’s progression from an assembler of clunky transistor radio sets to the world’s leading producer of flat-panel TV sets, computer chips and smartphones is a source of national pride.

Last year, Samsung accounted for 20 percent of South Korea’s US$527 billion in exports. That pride was dented, and economic unease deepened, when Samsung recalled more than 3 million Note 7 smartphones globally and decided not to produce any more, because some devices heated up and burst into flames.

“This is not just Samsung’s trouble. It’s trouble for the entire economy,” said Moon Jae-in, leader of South Korea’s opposition and a potential contender in next year’s presidential election, referring to the Note 7 crisis. “Because people take pride in Samsung as a brand representing South Korea, it is their trouble, too.”

On Thursday last week, South Korean President Park Geun-hye voiced concern about the Galaxy Note 7 recall’s impact on exports.

The economy has taken recent hits from rising unemployment rates and the bankruptcy of Hanjin Shipping Co. Its shipyards, among the world’s largest, are laying off thousands of people after posting huge losses because of shrinking orders and competition from lower-cost rivals in China.

Samsung is the best-known brand name South Korea has ever produced, ranking seventh in the 100 best global brands compiled by brand consultancy Interbrand. Its Galaxy smartphones have lifted its — and by extension South Korea’s — high-tech image more than any other South Korean product.

Having overtaken Sony Corp and other Japanese companies it once mimicked, Samsung has grown powerful enough to challenge Apple Inc, an icon of US innovation.

To many South Koreans, the Note 7 recall, the biggest ever in the mobile phone industry, is just another painful lesson for Samsung to learn from and pay for — the recall is estimated to cost it US$6.2 billion — in its quest to dominate yet another industry.

“All manufacturing companies, including the American and Japanese, make mistakes,” said Park Bo-yeon, 29, who was recently browsing in a handset shop in downtown Seoul where a notice urged customers to trade in Note 7s. “What matters is whether you can learn from them and move on. Samsung always has.”

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