“Smartphone and TV have entered low-growth generation.”
To celebrate 46 years of establishment, Samsung Electronics had sent out a message, which was sent under Presidents Kwon Oh Hyun, Yoon Boo Geun, and Shin Jong Kyoon, its staffs and executives that Smartphone and TV have entered low-growth generation. Samsung Electronics put emphasis on ‘entirely different change’, which has been receiving attention from markets as it interconnects with Samsung’s reorganization of structure such as selling chemical departments and others. This indicates that Samsung’s financial movements have started.
Samsung Electronics usually sends out a message on ‘overcoming crisis’ at its commemoration of establishment, but it is different this time as it officially mentions about decrease in Smartphone and TV businesses that are Samsung’s major businesses as well as number 1 in market shares globally. Fact that 3 presidents have evaluated major businesses as ‘low-growth’ businesses indicate that extensive reorganization of structure including major businesses and reorganization of personnel will take place. It seems that change in personnel on all of Samsung Group will take place at the end of the year.
“Major products such as Smartphone and TV in IT industries are starting to enter low-growth generation and current value chain is starting to change as advanced competitors are starting to introduce new technologies and business models. To overcome this crisis, we need an entirely different change in our group.” said Vice-Chairman Kwon with emphasis.
‘Entirely different change’ can be seen that it will strengthen fundamental correspondence towards changes in industries’ paradigms rather than problems involving development of products. All of major parts in Smartphones and TV have been modularized as Lego blocks. Chinese products are now not that different from Samsung’s products as they have begun to load Samsung’s displays and semiconductors, and consumers’ preference is also looking towards design, users’ experience (UX), and prices rather than products’ functions. As Smartphones’ performance became standardized due to development of technologies, consumers are now not putting too much importance in performance like they did in the past. All of these are definitely threats towards Samsung that needs to maintain its position as one of the leaders in the markets. Uncertainties in major industries definitely grew, and Samsung Electronics is basically saying that it needs retrenchment until new next-generation industries such as IoT, electronic equipment’s parts, and bio clearly emerge.
Samsung Electronics is suddenly stressing the importance of managing crisis, and it can be seen that uncertainty in future of Smartphones and TVs is its major factor. Although its 3rd quarter’s performance had exceeded Samsung’s expected value, voluntary resignations and reduction of overall costs have been preceded. These actions were done anticipatively, and its TV business, which is most likely to become number 1 for 10 years in a row until this year, even received a check of management efficiency by Samsung Group.
“As we face new changes in upcoming generation, we need to start everything such as development of products, management, Samsung’s culture, and others fresh so that we can be a leader in next generation.” said Vice-Chairman Kwon.
It is believed that Samsung Electronics will additionally carry out more-intensified innovation in all of working and management of group aspects. It can be seen that it will move personnel from its headquarters to on-site and it will reduce overall number of executives from group of presidents and executives personnel and minimize number of personnel at headquarters.
“We have been replacing crisis as opportunities. Let us make another new history with passion and effort from all of our executives and staffs.” said Vice-Chairman Kwon.
Samsung Electronics has started as Samsung Electronics Industry Corporation on 13th of January of 1969. As it merged with Samsung Semiconductor Communication Corporation on the 1st of November of 1988 and has regularized semiconductor business, it decided 1st of November as its commemoration day of establishment.
Senior Reporter Kim, Seungkyu | seung@etnews.com