Posted : 2015-12-02 18:02
Updated : 2015-12-02 18:36

Samsung expects tough 2016 in handsets

Samsung Electronics' new mobile devices chief Koh Dong-jin answers questions after a weekly Wednesday meeting with presidents of Samsung Group affiliates in the Seocho Samsung Tower, southern Seoul, Wednesday. / Yonhap

By Kim Yoo-chul

The new head of Samsung Electronics' handset business said Wednesday that the company doesn't expect its mobile business to see a "huge upturn" in profits next year.

"Next year will be tough," Ko Dong-jin, president of the company's IT and mobile communications (IM) unit, which has smartphones and tablets as a key component, told reporters after weekly Wednesday meetings with heads of Samsung Group affiliates in Seocho, southern Seoul.

The new president said that he plans to proceed his new and given tasks in close collaboration with Shin Jong-kyun, who was assigned to only handle mid-term strategies from this year's annual reshuffle of top management.

Ko said he doesn't think its smartphone business was in "deep trouble." "No major organizational overhaul is set," the executive told reporters.

Such remarks were against earlier market expectations that the handset division will cut the number of executives and have a large-scale organizational overhaul to cut costs and improve profitability with a leaner structure.

"I am thrilled to take the president's position," said Ko. He declined to offer comment to a question regarding the early possibility of the company's next flagship smartphone becoming available ― tentatively named Galaxy S7.

Samsung's mobile division supported Google-created Android operating system and gained a dominating position in the mobile market, which culminated in five consecutive quarters of record profits ending in 2013.

However, the bullish ride ended in 2014, though, when the company saw huge drops in profits due to its inability and tardy response to compete with budget Chinese vendors such as Xiaomi and Huawei.

Samsung Electronics was also blamed for not manufacturing enough handsets to meet demand for its Galaxy S6 Edge, which eventually proved more popular with consumers than Samsung expected.

The new mobile president Ko joined Samsung in 1984 after earning a bachelor's degree with an industrial engineering major from Sungkyunkwan University. He handled product and technology strategies at the mobile division.

Koh was previously in charge of Samsung's research division, where he oversaw the development of Samsung Knox and Samsung Pay. He was also in charge of the latest Samsung flagships, the Galaxy S6 and Note 5.

"Ko's strengths are depth of experience and knowledge in hardware-centric arena, meaning Samsung Electronics will focus more on the hardware-driven path," said one Samsung official.

The market for Samsung's smartphones is shrinking, as the company saw revenue from its mobile business drop 9 percent in the latest quarter from about 35 trillion won in the previous quarter.

Meanwhile, the company's TV chief Kim Hyun-seok said its TV sales will see a gradual increase next year as it expects major sports events to awaken idling demand for TVs by consumers in emerging and developed markets.

After the weekly meeting, Jun Dong-soo, who is regarded as one of the top confidents of Samsung Vice Chairman and apparent group heir Lee Jae-yong, said he will try his best to grow the company's medical equipment business "as quickly as possible."

Jun was transferred as president of Samsung Electronics medical equipment division ending his short stay as the CEO of Samsung SDS, the IT solution unit of Samsung.

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