During an internal Samsung event to mark the 43rd anniversary of Samsung Electronics, a subsidiary of the Samsung Group which is responsible for creating Samsung’s Android smartphones, the company’s CEO called on all executives and employees to find new growth engines to help Samsung succeed during the coming years. Kwon Oh-hyun, Samsung Electronics vice chairman and CEO said to those gathered, “If you are satisfied with what you have achieved so far, then we will fall down suddenly. For a bright future, Samsung shouldn’t stop its vigorous efforts to find the next cash generators.”
According the CEO, the economy is expected to see another slow year in 2013, the result of which is that no evolution means no future for the company. His statements come after Samsung Electronics reported record breaking results for the three months ending September 30 where the company’s net profit totaled $6 billion, up 91% from the previous year. With such strong results, market expectations remain high and the CEO needs to rally his troops to ensure the company continues to perform.
Although smartphone sales were a major factor in these profits. Samsung Electronics makes many other products including LCD and LED panels, televisions and semiconductors (including memory and flash memory). It is thought that advertising costs will rise for the company during 2013, something that will increase running costs and decrease profits. It is also believed that the company will cut investment in key facilities such as flat screens and memory chips during 2013. However company spokesman Shin Young-june declined to comment on this and other investment plans.
As part of its plans to find new markets and products, Kwon highlighted the the need for Samsung to hire more qualified human resources and to maintain a creative organizational structure. In a possible acknowledgement that Samsung has followed others into the smartphone market and was not a pioneer the CEO said, “Samsung wants to become a market creator in a real sense not just as a fast follower. There are two key pre-conditions; building up distinctive software platforms and eco-system.”
So the question is what will Samsung do next? It is enjoying great success with its Galaxy range of phones and tablets including the Galaxy S3, the Galaxy Note and the Galaxy tab. There will obviously be more iterations of these products and it is certain that Samsung is working on the Galaxy S4 and the Galaxy Note 3, but what the CEO is really saying is that revamping existing product lines isn’t enough to stay ahead, it needs to innovate, a word that – if we are honest – is more used of Apple than of Samsung.