Kim Hyun-bin began his journalism career at Arirang TV from 2012 to 2017, specializing in defense, foreign affairs and the economy. In 2018, he joined The Korea Times, covering society and business, and is currently responsible for embassy affairs.
Coronavirus may rattle tech industry's supply chain
Roh Tae-moon, president and head of mobile division at Samsung Electronics talks about the newly released 5G smartphones during a press conference at the Hyatt Centric Fisherman's Wharf in San Francisco, Wednesday (KST). Courtesy of Samsung Electronics
By Kim Hyun-bin
By Kim Hyun-bin
SAN FRANCISCO ― Samsung Electronics' mobile chief Roh Tae-moon said Wednesday (KST) that the spread of the deadly coronavirus may affect overall supply chain management of technology industries.
But the senior Samsung executive dismissed concerns that the virus would have a serious impact on Samsung's mobile business as the company was effectively “managing the situation” with its parts suppliers.
“Regarding whether the coronavirus will have an impact on our manufacturing, the virus is costing Samsung Electronics a bit because the issue is more about supply change management as a whole. We are handling the issue with our suppliers to minimize any potential impact on our flagship handsets including the Galaxy S20,” he told reporters in a news conference at the Hyatt Centric Fisherman's Wharf in San Francisco.
Roh stressed the impact of coronavirus on Samsung's supply chain would be “limited,” though the firm is constantly monitoring the situation for any changes. From smartphones to TVs, much of the world's consumer technology is either manufactured in China or relies on parts made there. Samsung runs mobile phone manufacturing lines in China.
He said Samsung Electronics had postponed all marketing events scheduled to promote the Galaxy S20 series and the Galaxy Z Flip in response to the spread of the virus.
As a back-up marketing plan for China, Roh said Samsung is launching various campaigns to promote the new phones online, adding this will ensure delays of promotional events will not impact sales.
“Samsung won't abandon the Chinese smartphone market. We should do well in India and I think we can do. Samsung expects to see some improvements from these markets from this year and I believe we could see a (profit) turnaround,” Roh told reporters on the sidelines of the unpacked event. Samsung's market share in China is a low single-digit, while in India, it ranks No. 2 after its chief Chinese rival Xiaomi.
Samsung may face a possible downturn in the global mobile phone industry, however, the executive remained rather positive despite any looming difficulties ahead.
“I can't tell you the specifics of the next foldable smartphone lineup, but Samsung is preparing various foldable phones to succeed the Galaxy Fold and Galaxy Z Flip. There are lots of technology challenges ahead before releasing new mobile devices equipped with wow factors other than the recently-released Galaxies. Samsung will release a new smartphone with the best form factor and at the right time.”
Roh said the Galaxy Z Flip was the result of three years of development to ensure greater portability when the device is folded. “I personally hope the Z Flip will appeal more to millennials,” he said, adding Samsung was aiming to push the released foldable handsets to mass market from the latter half of this year, at the earliest possible date.
“The initial response to the new Galaxies looks good from clients and I have high expectations that their sales will exceed earlier forecasts and previous models,” Roh said. Samsung shipped 36 million Galaxy S10s.
Roh is well-regarded for his knowledge of engineering and design and has been put in charge of improving Samsung's reputation when it comes to quality. Under his predecessor, the company released the Galaxy Note 7, which had a battery problem that caused devices to catch fire. Samsung also had to delay the Galaxy Fold due to display issues.
Roh said while Samsung Electronics is competing with Apple on the global market, his division won't chase the Cupertino-based iPhone designer in content-driven businesses.
“My conclusion is Samsung should go back to basics. Samsung will do what we can do well. In terms of content and relevant service, I think we should collaborate with global players, strategically. As we have to offer the best experience to users with the right timing, Samsung's mobile division is shifting the business's main path,” Roh said.
Samsung Electronics previously attempted to create its own mobile operating system. It also invested in music and cloud computing-oriented services products with the company introducing Bixby an “artificial intelligence” platform. However, these failed to impress.
While Roh is better known as a “cost-cutter” and a firm believer in active outsourcing, he told reporters that Samsung doesn't have any plans to massively increase its outsourcing for materials and components.