Samsung R&D spending expected to hit record high

By Kim Yoo-chul

Samsung Electronics’ investment in research and development (R&D) is expected to reach an all-time high this year in its pursuit of new business opportunities.

"This year's estimated spending by Samsung on R&D projects will be over a record 15 trillion won," an official said Sunday. The company spent 14.8 trillion won on R&D projects in 2013.

In its quarterly report, Samsung Electronics said it spent 11.41 trillion won for R&D projects for the first nine months of this year, up 5.3 percent from a year earlier.

This equates to 7.4 percent of its sales. Samsung reported 153.5 trillion won in sales in the January-September period.

The increased company spending is expected to help find new revenue streams as its market dominance in smartphones is wavering hit by heated competition.

Samsung said its third-quarter operating profit fell 60 percent from a year earlier to 4.1 trillion won, marking its weakest quarterly profit since 2011. Sales also plummeted 20 percent in the same period.

"Today's difficulties don't mean that Samsung Electronics will struggle in the future as it plans to invest more on future business projects for technology innovation" said the official.

Samsung Electronics operates three R&D divisions, all of them are tasked to develop newer products as part of a mid- to long-term strategy.

The company has been developing low-end smartphones. The Galaxy A-series at the mid-end will hit the market in the fourth quarter of this year beginning in China, followed by the E-series at the low-end in the first quarter of next year.

Flexible and foldable displays will be the hallmark of a high-end strategy and will most likely be unveiled sometime in 2016.