Samsung stresses new models, innovative thinking
By Kim Yoo-chul
Kwon Oh-hyun Samsung Vice Chairman
Samsung Electronics is at a major crossroads because the company needs to find new revenue channels beyond its conventional models, said one of its chief executives Monday.
In a New Year’s address to employees, Samsung Vice Chairman Kwon Oh-hyun said Samsung plans to invest more in order to increase its capabilities so it can lead its chief rivals, as a new order is prevailing in the global technology industry.
Kwon is one of the three co-CEOs with home appliances head Yoon Boo-keun and mobile chief Shin Jong-kyun.
“Samsung should be adaptive. Its landscape of industries is rapidly being reshaped as differences between technologies are being blurred. Without finding ‘something new,’ then our sustainability will be threatened,” the vice chairman told employees in an event held at Samsung’s research center in Umyeon-dong, southern Seoul.
About 500 company executives attended the event, while Lee Jae-yong, the de-facto leader at Samsung, failed to attend, Samsung said.
After Samsung Chairman Lee Kun-hee was hospitalized in a Seoul hospital due to heart surgery in 2014, Samsung has skipped holding a group-wide event at the group-owned Hotel Shilla in downtown Seoul. Samsung said there will be no New Year message to employees with the name of the younger Lee.
Specifically, Kwon said this year will be another year should Samsung Electronics tackle growing market uncertainties.
“Samsung expects that low global economic growth will continue throughout 2016. Another key issue is that we see greater uncertainty in emerging markets. Competition with our rivals in key businesses in which Samsung is involved such as smartphones, TVs and memory chips will become fiercer,” according to the senior company CEO.
The executive said FinTech and mobile health industries look promising and have huge growth potential as those two areas will benefit from the industry’s reshaping.
“Because these are new and emerging businesses, we should compete with our rivals with new ideas and new thinking,” the executive said, adding the value of hardware-driven business has weakened amid the emergence of innovative models such as O2O.
Open innovation was the last point on which the vice chairman focused. “Open innovation will come if we boosts efficiency in management, also helping Samsung be differentiated from others,” according to the CEO.
Samsung Electronics, the world’s largest manufacturer of smartphones, is expected to report below 7 trillion won as its operating profit for the fourth quarter of last year, hit by weak demand for tech products and the price decline in chips and displays of which the company ranked as one of global leaders.
The median forecasts of 25 local brokerages about the forecast of Samsung operating profits for the latest three months was 6.68 trillion won, said FnGuide, a local fund tracker. Samsung will announce its earnings for the fourth quarter of 2015 on January 8.
“Samsung Electronics is expected to report that its annual sales last year was more than 200 trillion won, while its total operating profit was less than 27 trillion won, which is against earlier market expectations,” an official who is familiar with the issue, said.