Samsung’s key factor is to always be in crisis mode

In other words, it seems like a fun place to work.

Samsung's Headquarters at South Korea
Samsung's Headquarters at South Korea

I’m standing inside Samsung Digital City, where some 35,000 employees work, eat, play, and work some more in Suwon, South Korea. It feels like a university campus with green parks, throngs of young people, social clubs and coffee shops. There’s also a massive cafeteria where everything, from pizza to kimchi, is free.

But Samsung, the world’s largest maker of smartphones, TVs and memory chips, is perpetually in crisis mode.

That couldn’t be more true, now. Global smartphone sales are declining, pressuring Samsung Electronics’ largest business line. (Exploding phones in 2016 didn’t help.) An escalating trade war between South Korea and Japan threatens to raise the company’s costs. And Samsung’s de-facto leader Lee Jae-yong, the chairman’s son, is also facing a retrial on bribery charges.

Under pressure on multiple fronts, Samsung is eager to find the next big thing beyond smartphones or memory chips to power the company’s future growth. It’s pouring some $22 billion over three years into areas like 5G and automotive electronics, led primarily by investments in Samsung Electronics. (The conglomerate’s other business lines include shipbuilding, construction and insurance.) Much of that innovation and experimentation is coming out of secretive research and development labs at Digital City.

Crisis culture and constant creation

Samsung's smartphone
For a company built on a crisis culture, that constant cycle of inventing, failing and reiterating is baked into the DNA. “The key thing about crisis is how you are going to manage the risk, how you are going to handle that business for the future” says Samsung Electronics CEO and President Hyun-Suk Kim. “We believe that crisis is our opportunity for our future growth.”

On my way to Samsung’s top secret R&D labs, I pass through the company’s Innovation Museum, an area that’s open to the public. It’s not just Samsung products on display: It’s the big names in consumer tech history. I spot a Hoover vacuum cleaner, a classic Sony Trinitron TV and early semiconductors by Intel. It’s a walk through a timeline of human ingenuity, from the discovery of electricity to the first, brick-sized, mobile phone — and it’s a symbol of how Samsung sees its rightful place in the unfolding history of invention.

Declining smartphone sales hit Samsung and Apple

Worldwide, the smartphone business is stagnating. Among the three biggest makers, only Huawei’s smartphone sales are growing.

But the vibe upon entering Samsung’s R&D labs is completely different. Security systems in every building scan everyone on the way in and out, including employees.

Of course, Samsung’s biggest competitors — companies like Apple, Huawei, Google and Amazon — all have secretive labs, too. But Samsung has a reputation for throwing things against the wall to see if they stick, often at a faster rate than its rivals. That strategy is great when it works — but it also leads to the occasional flop. One example: Earlier this year, when Samsung rushed its folding phone Galaxy Fold to market, early reviewers complained of defective hinges and broken screens. Samsung pulled the phone, tweaked the design, and has since launched a new version in South Korea.

After my ID and the crew’s camera equipment are checked multiple times, we are whisked to a gleaming white garage dedicated to Samsung’s Digital Cockpit project. There, Samsung Vice President Taejung Yeo, who heads the project, and his team of engineers dismantle a car to install a high-tech dashboard.

“We believe that crisis is our opportunity for our future growth.”

Hyun-Suk Kim,
Samsung Electronics CEO and President

Smartphone shipment market chart
Smartphone shipment market chart

The Digital Cockpit was first unveiled at the 2018 Consumer Electronics Show, but I’m told I’ll be the first journalist to test version 2.0.

Inside the Digital Cockpit, which Samsung says could hit the market as early as 2020, six screens stretch from one side of the car to the other, providing a souped-up, digital rehash of a traditional dashboard. Instead of relying on a giant tablet computer like you’d see in a Tesla, Samsung has chosen to stay with the dashboard experience to offer a streamlined, horizontal interface.

The set of screens features two side-view “e-mirrors” that use augmented reality to highlight moving figures nearby for greater situational awareness. Nine on-board cameras help me see what’s around me, even in the rain. “We can detect pedestrians outside the vehicle or bicycles to make the driver know as early as possible to avoid an accident,” Yeo tells me.

Of course, Samsung is not alone in its ambition to corner the connected car market. Many cars already have crash avoidance features and touch screens. And some of the biggest names in tech have entered the game, including Intel through its acquisition of vision-safety software firm Mobileye, as well as Google parent Alphabet through its Waymo unit.

But the speed at which Samsung has become a major player in automotive tech is impressive. Four years ago, the company had hardly any footprint in the market. Then, in 2016, it bought US-based Harman International Industries for $8 billion. By 2018, Harman-Samsung was the No. 1 distributor of auto-infotainment components, worth around $5 billion revenue, according to Strategy Analytics.

Samsung Chairman Lee Kun-hee
Samsung Chairman Lee Kun-hee

Samsung is also trying to distinguish its systems by connecting them to technology beyond the car. Using the Digital Cockpit, I can not only access maps, play music and stream videos for fellow passengers, but also control the temperature of my living room at home and even see what’s inside my kitchen refrigerator.

At the moment, that kinda feels like too much information.

“We try to avoid driver distraction,” Yeo says. “This is deliberately designed to avoid unnecessary distraction.”

I’m not so sure. Do I need to be this hyper-connected while hitting the highway? Maybe, I’ll change my mind when driverless cars eventually become a reality — but for now, I’ll take that peek into my fridge another time.

Walking with a wearable robot

As soon as I enter Samsung’s Advanced Institute of Technology (SAIT), I recognize him: “Roboray,” Samsung’s walking humanoid robot, suspended behind a low cubicle wall in a far corner of the robotics lab. No longer in development, he’s now a lifeless mascot for a team of technologists who are working on a new wave of robotic innovation — robots that we can wear.

South Korea Samsung's offices
South Korea Samsung’s offices

Young-bo Shim, the head of SAIT’s Mechatronics Lab, and his team have developed a product they call the Gait Enhancing Motivation System or GEMS.  True to its name, it’s a walking assistant designed to help wearers improve strength and balance. Shim believes it could one day help workers with physically demanding jobs as well as disabled people and senior citizens.

It takes about a minute to strap the system over my trousers and onto my hips. Fortunately, it’s lightweight, at just over 2 kilograms (4.4 pounds). The system is sleek with no extra buttons or dials. A set of oblong white disks containing sensors and motors are positioned on the sides of my hips and at the small of my back. I take a few quick steps … and then I start to feel it.

There’s a tingling sensation from the sensors located on my hips. Those sensors measure and predict my gait based on just a few steps. And then, in a very subtle way, the technology lifts my legs with every step. I feel an added assist as if someone is underneath me and guiding me forward.

When I sprint across the lab and race up a set of stairs, the feeling of enhanced mobility is even more pronounced. The GEMS system can also be programmed to add resistance and challenge my movements — a feeling akin to walking forward in a swimming pool in waist-high water. “The most optimal exercise for elderly people is walking. So this system is designed to help people and to reinforce muscle while walking,” says Shim.

For Samsung, health care is not a new field. The larger conglomerate has been in the space since it opened a hospital, the Samsung Medical Center in Korea in 1994. But like a lot of its rivals, Samsung Electronics sees the convergence of medicine and tech as a big industry ripe for disruption. And of course, there are huge revenue possibilities there, too: nearly $6 billion in the exoskeleton industry alone over the next decade, analysts say.

GEMS is still in development mode, but the race to market is on. A number of performance-enhancing suits are already on the market from Hyundai, Honda and Sarcos Robotics. But compared to those powerful exoskeletons, Samsung says the GEMS system is a lighter option that purposely tucks away its robotic elements.

Heart trackers, cameras for firefighters and mini printers

Samsung Engineer
Engineers of Samsung Mobile Healthcare Lab wear protective goggles while working with laser, Samsung Advanced Institute of Technology, Suwon, South Korea, 25 Jul 2019.

In another corner of the SAIT complex, I enter the Mobile Healthcare Lab where researchers are developing sensors so our smartphones can help improve our health.

The team sits me down to take my blood pressure using a traditional monitor you can find in the doctor’s office. Then, they take my blood pressure using their new app and the existing heart rate sensor located on the back of a Samsung Galaxy smartphone. Although heart rate and blood pressure are linked, blood pressure is technically more difficult to measure. After a couple false starts, the blood pressure app on the smartphone nails it.

Amid reports that Samsung’s new Galaxy Watch Active will have ECG heart rate tracking, the team only confirms it is developing an electrocardiogram or ECG heart rate tracker. (They don’t acknowledge whether a smartwatch is involved.) It’s also working on a wearable device to track glucose levels in a non-invasive way — something that Apple is reportedly also exploring as a new Apple Watch feature.

Perhaps the biggest innovation in Digital City isn’t actually a product but a place. The C-Lab is the heart of Samsung’s Digital City. It’s a bright, colorful workspace with a mission to cultivate the next big idea.

Samsung says any employee can apply to enter the C-Lab and become an innovation leader regardless of job title and experience. Ideas are submitted through an online ideas platform. Employees with winning applications can then enter the lab to refine a prototype until they are field tested in the real world and are eventually deemed fit for market. A company policy allows employees to spin off successful C-Lab projects into separate, independently-managed companies, which Samsung supports with seed money. Samsung typically retains a minority stake in the spun-off startups.

Inside Samsung's offices
Woojune Kim, Senior VP of Samsung’s Network Business, gives a tour of a 5G connectivity lab to CNN correspondent Kristie Lu Stout, Samsung Digital City, Suwon, South Korea, 25 Jul 2019.

Since the C-Lab opened six years ago, more than 250 successful projects have been developed including the “nemonic” mini printer, which prints photos and memos as sticky notes without ink or toner. The company now making the compact smart printer, Mangoslab, spun out of Samsung’s C-Lab and launched as a full-fledged startup in 2016.

Hyungmin Joo is a Samsung engineer with Ignis, a C-Lab maker of thermal imaging cameras for firefighters to use hands-free during rescue operations. The cameras can be attached to a mask or the firefighter’s suit.  “Actually, this is not just my idea,” Joo tells me while holding the camera. “It’s from the feedback from real firefighters.”

Using advice from frontline firefighters, the team developed cameras that are compact, easy-to-use and able to withstand water, dust and extreme heat. The cameras are already being used by hundreds of firefighters in the field in South Korea as well as Vietnam.

Another C-Lab project, Relúmĭno, is developing software to help the visually-impaired see. “It’s still in the development stage, so we have a long way to go,” Junghoon Cho, Relúmĭno’s project leader, tells me. “But I just hope that we can help the visually-impaired feel the same joy of ordinary life that most of us usually take for granted.”

To experience how it works, I first put on a pair of opaque glasses to blur my vision. Everything around me appears as a milky white blob.

But when I overlay a VR headset paired with a Samsung smartphone and the Relúmĭno app, I am immediately able to make out the figures around me. What was once a blob has transformed into recognizable objects and people with outlines and greater definition.  It had been a while since a gadget made me literally gasp out loud.

Samsung's CEO Hyun-Suk Kim
For CEO Hyun-Suk Kim, who has worked at Samsung since 1992, the C-Lab represents that leading edge for Samsung Electronics. “They are creating a startup culture inside Samsung. We want to make our culture different,” Kim tells me.

Using a variety of algorithms, the Relúmĭno software detects and enhances outlines for the user. The experience is like seeing the world traced over with a felt-tip marker. For people with visual impairment, it can allow them to pick out outlined objects and people from the rest of the scene. Although it currently uses a Samsung VR headset to block out ambient light and show the enhanced image on its optical lens, Samsung is developing other hardware, including glasses, that will serve the same function.

There are other rivals in this niche market: eSight, NuEyes and IrisVision all provide headset-based technologies to improve sight for the visually impaired. But Cho claims Relúmĭno’s algorithms give his technology the edge. “We’ve tested this with many visually impaired people with glaucoma, cataracts and age-related macular degeneration, and our algorithms simply test better, in our experience,” he says.

Whereas earlier in its history, the company operated more through top-down directives, now it’s trying to encourage more creativity to flow at all levels of the company, he says.

“Innovation is our job,” he says. “The reason Samsung is successful is innovation.”

Before leaving Digital City, I make one last pass through a set of metal detectors. Security is tight, and everyone and everything is scanned to make sure all intellectual property remains on site.

“We want to make our culture different.”

Hyun-Suk Kim,
Samsung Electronics CEO and President

Throughout the C-Lab and its R&D centers, Samsung employees are racing to innovate. But they should also be wary of racing their products to market too quickly. In the wake of failed product launches in the past like the Fold earlier this year, analysts say the Korean tech giant needs to balance speed with execution.

“They are aggressive, sometimes a bit overly aggressive,” says Bryan Ma, vice president of client devices research at IDC.

“But in the grand scheme of things it is good because it keeps them on that leading edge of technology.”


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