Samsung CEO warns of tough year ahead

by: Rob TriggsJanuary 4, 2016
942

samsung logo mwc 2015 8

Samsung may still be selling hundreds of millions of smartphones each year, but the electronics giant is already warning of another tough year. The company cites weak global economic conditions and increasingly competitive markets as reasons to reign in expectations for 2016.

Addressing employees in a New Year statement, Samsung vice chairman and co-chief executive officer Kwon Oh Hyun stated that uncertainty in emerging markets could further hurt the company’s revenue and profit margins, and he encouraged employees to adapt to weakening traditional hardware values to keep the company ahead. A similar message was recently conveyed by Samsung’s mobile chief, Koh Dong-Jin.

“The competition landscape is changing to software and platforms, so we need to build a new system and competence,” – Samsung’s Kwon Oh Hyun

The statement comes amid growing concern that Samsung’s fourth quarter earnings may come in lower than expected. Korea Investment recently lowered its estimate to 6.4 trillion won ($5.41 billion) from 6.8 trillion won. Falling prices in the semiconductor and display markets are expected to hit Samsung’s profits particularly hard, as the company has been relying on additional income from these growing business sectors to offset the falling revenue from its mobile division.

Samsung's 2015 hardware:

Samsung has been attempting to shake up its mobile unit to meet the challenge of shifting market conditions. The company appointed Koh Dong-Jin as the new head of the division back in December. Samsung executives are also apparently pointing some blame at its mobile software, which seems to be reflected in this recent statement, and there are said to be plans to cut smartphone shipments this year.

Samsung is expected to issue its official earnings guidance for the fourth quarter this coming Friday.

  • saksham

    oh please AA after being so much criticized about u hating samsung u still post an article like this ? every company ‘s executive or something said it to their company like sony or lg or any fricking company that had revenues down by some percentage

  • Lord Argyris

    “The competition landscape is changing to software and platforms, so we need to build a new system and competence”

    Translation: “We’re doubling down on TouchWiz and on duplicating Google’s services with our own software in a fruitless effort to lock consumers into the “Samsung ecosystem”, instead of figuring out and addressing the actual reasons consumers are buying other makers’ phones. We just can’t seem to get it through our heads that the only reason lock-in works for Apple, and why it will never work for Android OEMs, is because Apple controls both the hardware and the iOS software ecosystem.”

    Either that, or they’re going to push Tizen harder in developing markets.

    • Toukale

      What else can they do at this point? Samsung missed the boat on that front. They builded their house on someone else land, which was fine for awhile. Now that things are changing they found themselves in a not so enviable position. I don’t see a way out of it for them either, trying to build a smartphone os right now is like fighting today’s and yesterday’s war instead of focusing on the next battle front. The bigger question for every oem’s not name Apple is what lesson did they learned from the pc space? It seemed like non of them learned the right lessons and repeated it with the smartphone market. Hopefully that won’t be the case for the next big thing for their sake.

      • Ivan Budiutama

        Well, to be fair, the pie is hardly getting bigger. whether Smartphone chart nor android chart in general. Meaning, people without smartphone are either poor or old or both. which means, if you want to make the pie bigger, you must build a phone that cost the less. That is the reason why budgeted phone like Zenfone sell well on emerging market (India, Indonesia, Malaysia, etc). As for flagship.. well, there aren’t much change happened, fanboys will replace their phone yearly for the brand they worship, tech geek with money will buy the latest device in spite of the price (and brand), poor tech geek (like me) will use their phone until it literally became brick (and no longer spare part to find).

        • Toukale

          Fine and all but there are no profits to be made from those folks either. Google, Apple and Samsung already have their best customers. There are little to no money to be made from the rest of those consumers, not from hardware, software or services front. What will happened instead, is the first billion will help subsidize it for the rest. It’s also a reason why I don’t pay “too” much attention to what is going on in that part of the market. Very little opportunities will come from that end that will affect the market overall.

      • Lord Argyris

        That’s certainly all true. What I feel really got Samsung in trouble is they focused too heavily on Apple, rather than carving out a clear identity of their own. As long as they had the “anti-Apple” market sewed up, which they managed for a while through brute force advertising and product lineup tactics, this worked. But merely being the antidote to your biggest competitor is never a good long-term solution. It gets stale. People became increasingly bored of Samsung’s iterative yearly updates, and the Android competition caught up and bled off market share, leaving Samsung in a position where they have to somehow convince former customers to return.

        If I had to advise them, I’d give them the obvious advice that’s been offered for years all over the Internet: consolidate their lineup to three, maybe four devices max; slim down the software and extraneous features and apps, do an actual hardware design refresh instead of just fashioning the same iterative design out of metal and glass, eschew any and all hardware and software gimmickry, and take a look at what Motorola has done with the Moto G and try to come up with a sold < $250 competitive midrange device to entice people who would otherwise buy last year's flagship.

        • Toukale

          All sound advice, but futile nonetheless. Samsung got to where they were, not by mimicking Apple, but Nokia. They are everywhere and every market. You said so yourself, Samsung do not have a loyal base, android does. That’s their biggest problem right now, and that puts them in the same position as the Xiaomi and huawei of the world, since they do not control the platform.

  • Avieshek Rajkhowa

    Same-sung “that keeps singing the same thing”

    “Apple is bad, Apple doesn’t ‘ve removable battery, Apple doesn’t support SD card, Apple only has this megapixel camera”

    • saksham

      bitch please u live in india as i do where samsung has no respect to a richer community cause they heard from poor people that samsung lags and shit … pls tell WTF would happen if they bought 5000 – 10000 worth of a device and used it FOR 3 FUCKING YEARS ?

      • Avieshek Rajkhowa

        Didn’t get u’r point, buy a Motorola

        See Lord Argyris reply to Tourkale that’s the elaboration of wh’t I meant

        • saksham

          i mean the rich in india ALL HAVE apple’s twinkies and they have no respect for samsung but if u go to the west and have the high end samsung phones , they will accept u in their world and not think that ur a poor shit or anything

          • Avieshek Rajkhowa

            If u r a Ambani or a Politician why would u think, theres any thought of spending, it’s negligible out of crores.
            For I, using the J-series as well as the MacBook Pro, ‘m enjoying the community, there’s nothing like that.

  • RiTCHiE

    Samsung is becoming the biggest joke ever in the smart phone bizz. They say things like this because the new s7 is nothing new so they kinda know the sales wqill go down.

    • Arpan Ghosh

      as if iPhone 6 was new :v

      • RiTCHiE

        Apple was never known for latest tech but Samsung is but Samsung been dead to me for a while and love my Sony z5

  • Daggett Beaver

    What? Didn’t Google sell a gazillion Nexus 6Ps with Samsung displays? With the profits from all those sales, Samsung should be rolling in dough for decades. After all, the Nexus 6P is the best Android phone of 2015, or so the webzines keep telling us.

    • Karly Johnston

      Yes and even Apple will be using their displays in the future. Samsung will be around forever, its mobile division is in question.

  • Avieshek Rajkhowa

    Anybody checks PatentlyApple, MacRumors, 9to5mac?

  • Gottolaugh

    Wonder if they should listen to their customers :) for a change.

    • Daggett Beaver

      Yeah, if they’d only listen to customers, they’d sell the most smartphones in the world.

      Oh, wait…

  • Ahmad Hamad (Link Master)

    Note 5 users or S6 users go go to settings and then wallpaper then see if the icons look diffrent.

  • The-Sailor-Man

    AA you did it again!
    Apple FTW !

  • Kunal Narang

    Yup, Samsung needs to build TouchWiz to near-stock UI. It’s nice to see that Samsung has identified where it is lacking in areas than the competition.

  • aaloo

    DOOMED!!!!

    but they are beginning to think straight now by launching iPhone support for their wearables. apple customer base is what’s going to make you money; so build stuff for them to use with their devices.

  • Adeeb Peerboccus

    The reason i think people love Apple is that everyone who has the hardware requirements can taste a new update both features and design but Samsung seems to keep different design and UI and the second thing is that Apple update its products at least 3-4 times before a particular device stop receiving new OS update unlike Samsung who supports devices only for two main updates and sometimes the UI doesn’t change.