Samsung burned 150,000 of its own devices. Then it overtook Nokia.
Its phone defect rate had hit 11.8%.
In 1994, Samsung's phone division rushed phones to market, according to the Korea Economic Daily. Chairman Lee Kun-hee gave some as New Year's gifts, then learned they did not work.
In March 1995, he had 150,000 phones and fax machines piled in a field outside the Gumi factory and set on fire. More than 2,000 employees watched. One employee told NPR that Lee warned: "If you continue to make poor-quality products like these, I'll come back and do the same thing."
Samsung's phones went from fourth to first in Korea that year. Overtaking Nokia took longer: in early 2012, Samsung Electronics shipped more phones and ended Nokia's 14-year run at the top, according to Strategy Analytics. Samsung reported 2025 revenue of 333.6 trillion Korean won.
Project managers face a smaller version of this choice whenever a launch date arrives with known defects.
One-minute true story. AI-generated illustration with narration by an AI voice.
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What the captions say
- This is the story of how Samsung burned 150,000 of its own phones and fax machines, and 17 years later overtook Nokia.
- In the early 1990s, chairman Lee Kun-hee wanted Samsung to become the world's leading company. Its phones were not ready.
- In June 1993, Lee summoned Samsung's executives to Frankfurt and told them, "Change everything except for your family."
- But the next year, Samsung's phone division rushed its phones to market, and the defect rate climbed to 11.8 percent.
- Lee had given Samsung phones as New Year's gifts, and learned they did not work. In January 1995 he ordered every faulty phone replaced.
- By March, 150,000 phones and fax machines lay in a field outside Samsung's Gumi factory, more than 2,000 employees around them.
- Then, in front of all of them, Lee had the whole pile set on fire.
- One Samsung employee recalls the chairman's warning that day: "If you continue to make poor-quality products like these, I'll come back and do the same thing."
- When the flames died, bulldozers flattened what was left. That same year, Samsung's phones climbed from fourth place to first in Korea's market.
- In early 2012, Samsung shipped more phones than Nokia, ending Nokia's 14-year run as the world's biggest phone maker.
- Samsung Electronics' sales for 2025 came to 333.6 trillion Korean won, the company reported in January 2026.
- Lee had once put it plainly: "Get rid of defect rates even if it means we shut down."
