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News Center Company News
Can Samsung Survive Without Guiding Light?
  Lee Yoon-woo, the new CEO of Samsung Electronics officially started his job Tuesday. And Samsung officials couldn't be happier as the technology giant is urged to find new momentum for sustainable growth amid fierce competition in the global electronics industry.

"We should nurture future growth engines and secure more 'killer business items' to make the company as the real global player," the new chief executive told some 700 Samsung officials including the group's heir apparent, Lee Jae-yong, in an inauguration event held in its technology compound in Suwon, Gyeonggi Province.

"We should revolutionize organizational culture by securing more competitive human resources. By maintaining a creative management scheme, we can grab more opportunities to penetrate highly-promising sectors," Lee said, by hinting that Samsung will massively invest into new IT devices such as flexible displays, wearable computers, robots, bio and health-related segments.

But Samsung insiders say the South Korean technology giant is now on the front-line to tackle growing uncertainties over its traditional money sources, first.

They say the world's biggest memory chipmaker is in trouble, brushing off questions over the highly-volatile memory chip business and the lack of design sophistication for its mobile phones, hampers the world's No. 2 handset maker in appealing to global consumers with higher purchasing power.

"Yes, showing a greater focus on possible next-growth engines is fine for me, however, our company should be more aggressive to strengthen the non-memory chip business," an official from Samsung Electronics said.

Against earlier predictions, the chip giant has been hesitating to inject more cash to nurture the non-memory business after it had bought Tel Aviv-based TransChip, last year.

Lee Yoon-woo, the new CEO of Samsung Electronics officially started his job Tuesday. And Samsung officials couldn't be happier as the technology giant is urged to find new momentum for sustainable growth amid fierce competition in the global electronics industry.

"We should nurture future growth engines and secure more `killer business items' to make the company as the real global player," the new chief executive told some 700 Samsung officials including the group's heir apparent, Lee Jae-yong, in an inauguration event held in its technology compound in Suwon, Gyeonggi Province.

"We should revolutionize organizational culture by securing more competitive human resources. By maintaining a creative management scheme, we can grab more opportunities to penetrate highly-promising sectors," Lee said, by hinting that Samsung will massively invest into new IT devices such as flexible displays, wearable computers, robots, bio and health-related segments.

But Samsung insiders say the South Korean technology giant is now on the front-line to tackle growing uncertainties over its traditional money sources, first.

They say the world's biggest memory chipmaker is in trouble, brushing off questions over the highly-volatile memory chip business and the lack of design sophistication for its mobile phones, hampers the world's No. 2 handset maker in appealing to global consumers with higher purchasing power.

"Yes, showing a greater focus on possible next-growth engines is fine for me, however, our company should be more aggressive to strengthen the non-memory chip business," an official from Samsung Electronics said.

Against earlier predictions, the chip giant has been hesitating to inject more cash to nurture the non-memory business after it had bought Tel Aviv-based TransChip, last year.

"Samsung wants to surge ahead of Intel, however, such hope couldn't be materialized without implementing more bold actions," the official said.

In the handset business, brand image boosting has emerged as a top concern for the Nokia chaser as the company is shifting business-to-customer business models to shy away from the rather stable business-to-business model. Samsung Electronics sells its phones mainly to a small number of operators.

With Motorola on a downward spiral, Samsung's cross-town rival LG Electronics was the virtual winner in the $142 billion-a-year global cell phone business thanks to aggressive marketing on designs.

"In the business-to-customer sector, design is one of the significant factors and that's why we have been promoting a 'design-focused' strategy on our phones," another Samsung official said, adding a steady decline in low-end phones is dragging down Samsung phone's images.

According to data from GfK, a market research firm, Samsung's C-160 mobile sold for $51 and $44 in India and Brazil, respectively, in January this year. In the Indian market, the price of the phone fell from $62 in the second quarter of last year.

In the home appliances sector, Samsung Electronics has been in trouble to narrow market share with LG Electronics across the globe.

According to industry estimates, LG Electronics reaped $12.6 billion in total home appliances sales, globally, after Whirlpool and Sweden-based Electrolux. Due to greater portions on mid- and low-end products, Samsung's global share in the home appliances sector has stagnated over the past couple years.

"As the company has virtually neglected the home appliances business compared to chips and mobile phones, we are struggling to secure original technologies," a Samsung source told The Korea Times. The official asked not to be identified citing the sensitivity of the issue.

Also in the liquid crystal display television market, Samsung Electronics is urged to widen the gap amid the deepening uncertainties ignited by a united attack by Japanese rivals with price cuts.

"We are reviewing possibilities to merge MP3 and PC business to the telecommunication unit because we are positive the possible restructuring will bear a 'synergy effect' amid the convergence trend in the global digital electronics industry,"  a Samsung spokesperson said.

"As far as I know, there will be a big-scale restructuring and upcoming shake-up under the new CEO and the timing is likely tomorrow," the official said.
release time :2008-5-21
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