Following Samsung Electronics’ earnings shock in the third quarter, the head of its semiconductor division issued an unusual apology, intensifying the company’s sense of crisis. This has drawn renewed attention to the famous Anycall bonfire orchestrated by the late Samsung Chairman Lee Kun Hee. At the time, Chairman Lee ordered defective early models of the Anycall phone to be burned after their defect rate exceeded 10%.
In 1993, Honorary Chairman Lee emphasized business innovation with his New Management Declaration in Frankfurt, stating, “Change everything except your wife and children.” Two years later, in 1995, with Anycall’s defect rate surging to 11.8%, he directed what became known as the Anycall bonfire.
On March 9, 1995, fierce flames engulfed the sports field at Samsung Electronics’ Gumi plant, destroying 150,000 mobile phones worth approximately KRW 50 billion (USD 36 million) and reducing them to ashes.
Reportedly, around 2,000 Samsung employees gathered to burn the phones they had developed, underscoring Samsung’s commitment to quality management under the banner “Quality is my character and pride.” The results were remarkable.
Following this incident, Samsung Electronics’ domestic mobile phone market share, which had hovered around 30%, surged to 50% just four months after the bonfire ceremony. Consequently, the share of foreign brands like Motorola, which had been performing well, plummeted to about 10%.
In 1997, Samsung Electronics’ mobile phones were selected as the official wireless partner for the Olympics, marking the start of the company’s global recognition. By 2012, Samsung had surpassed Nokia, which had long held the top spot in the mobile phone market until 2011.
However, concerns about a potential crisis at Samsung have recently been raised. According to preliminary results released by Samsung Electronics on October 8, the company’s sales and operating profit for the third quarter of this year were approximately KRW 79 trillion
(USD 57 billion) and KRW 9.1 trillion (USD 6.5 billion), respectively. While sales grew by 7% compared to the previous quarter, operating profit fell by 13%.
Additionally, operating profit fell significantly short of the market’s forecast of KRW 10.7717 trillion USD 7.7 billion), as estimated by financial information provider FnGuide. Following the announcement, DS Division Head Jeon Young Hyun, appointed as Samsung’s savior in May, issued an unusual apology, saying, “I am sorry for the results that fell short of market expectations and caused concern for the company’s future.”
The business community is watching closely to see if Samsung Electronics will overcome a crisis again, with the Anycall bonfire as a pivotal example. One industry insider remarked, “Samsung’s history is one of overcoming crises. Just as it turned a corner and achieved growth through the Anycall bonfire, there is reason to watch how it tackles this crisis with its characteristic resilience.”
Since the Anycall bonfire, Samsung has consistently turned crises into opportunities. After the iPhone’s release in 2007, Samsung challenged the company, and Samsung responded by discontinuing its Omnia series and introducing the Galaxy S series. Similarly, in 2016, when the Galaxy Note 7 battery defects surfaced, Samsung responded decisively by recalling all 2.5 million units, once again turning a crisis into an opportunity.
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