Culture shock – Samsung’s mobile woes rooted in hardware legacy @ Reuters.

Efforts to revive its once stellar smartphone fortunes may be doomed if Samsung Electronics cannot overcome its dominant engineering culture, according to serving and former executives and those who have dealt with the company.

This culture, they say, has stymied many previous efforts to develop software and service platforms to support the smartphone business. In the past year several such services have closed down, at least one of them within a year of being launched.

“There’s a lot of distrust of top executives who can actually implement stuff that is more of a software and services offering,” said one person familiar with the company’s inner workings. “It’s still ‘we know how to sell boxes, we sell boxes’.”

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Interviews with former and serving employees paint a picture of confusion and overlap between competing divisions, where the short-term interests of promoting hardware trump long-term efforts to build platforms that would add value for customers and increase their loyalty to the brand.

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This story sounds a lot like SONY. SONY had amazing hardware from the Walkman to the SONY VAIO, but over time the software that made it all work, or the DRM that was added took away from the experience instead of adding to it. As hardware became more mobile and personal the daily friction with the crummy SONY apps just wasn’t worth it for early adopters. With hardware, there’s churn, margins shrink, having some software / UI that people are loyal too is become (or is) as important as the hardware itself. We’ll see how Samsung navigates which might be called the SONY test.