Best columns: Business
How Samsung sped into trouble
Samsung’s need for speed has finally backfired, said John Gapper. What the world’s largest smartphone maker “lacks in originality,” it has always made up for with lightning-fast execution. Samsung has never matched Apple in innovation, but it has kept pace in a cutthroat industry by rushing feature-crammed smartphones to market just in time to beat the latest iPhone, even while competitors like Nokia and Blackberry “have fallen by the wayside.” And while Apple takes in more profits overall, Samsung boasts strong profit margins on each device, which is unusual for an Android phone manufacturer. But it’s a strategy that “leaves little room to maneuver.”
In August, the company was forced to recall some 2.5 million Galaxy Note 7 smartphones just two weeks after the device launched. In short order, Samsung said it had fixed the battery flaw that caused devices to catch fire. Instead, it appears Samsung “found a quick fix and deployed it with characteristic speed and efficiency, only to discover that it was wrong.” This month, after more reports of exploding Note 7s, Samsung stopped manufacturing the device altogether. Now, in addition to suffering the $2.3 billion cost of scrapping the devices, “Samsung has damaged its image as well.” And all in the blink of an eye. If nothing else, “that is typical Samsung.”
America’s economic pipe dreams
The Wall Street Journal
Of all the presidential campaign promises currently being made, “none will be tougher to keep” than making the U.S. economy grow faster, said Marc Levinson. With the economy struggling to expand at 2 percent a year, both candidates “would have us believe” that 4 or 5 percent growth is easily within reach. History shows, however, that such a rate is wildly unrealistic. Over the past two centuries, per capita incomes in advanced economies have grown roughly 1.5 to 2 percent a year. But “Americans expect the economy to be buoyant, not boring.” Blame it on the inflated expectations set by the post–World War II boom years. Between 1948 and 1973, the world experienced “the most striking stretch of economic advance in human history.” Unemployment, for all practical purposes, “was nonexistent”; the amount produced in an hour of work roughly doubled in the U.S. and tripled in Europe. But almost as suddenly as these remarkable gains appeared, they began to taper off, for a wide variety of reasons. Some are obvious: Forces driving growth, like tens of millions of workers moving from farms to cities and becoming vastly more educated, simply can’t be repeated. We’d be smart to accept the hard truth: “The U.S. economy isn’t behaving badly. It is just being ordinary.” And we have a lot more of it ahead.