Changing Samsung at Every Crisis

Chairman Lee's crisis theory has appeared again. Each time Chairman Lee has expressed a crisis theory, Samsung has tried something new. In 1993 in Frankfurt Germany, Chairman Lee proclaimed new management by saying "Change everything but your wife and children," making reference to a crisis theory. Afterwards Samsung Electronics quickly improved its structure and become one of the leading companies in the world. In 1995 Samsung Electronics become the first company to achieve a trillion won in profits. In 2007 Lee explained about the Sandwich Crisis in which Korea was stuck between the race of China catching up and Japan leading the way, and last year after returning to management he talked about another crisis.

With his comeback in March, Chairman Lee alerted every one of the oncoming crisis by saying "The present is at risk. World-class companies are crumbling away, and so could Samsung. In 10 years the product and product families that represent Samsung will vanish. We must start over. There is no time to hesitate, we must march forward and not look back."

Afterwards Samsung Electronics announced new industries that were to be cultivated to be their new growth engines. Without the crisis theory of Chairman Lee Kun Hee, they could have been items that Samsung would only pass on by. Upon receiving the inspection results of Samsung TechOne last June, Chairman Lee commented that "Samsung's pride of being a clean organization has been damaged. The whole of Samsung group is now corrupted." With this statement, Samsung which had been overlooking its wrong customs had changed.

Without Chairman Lee's crisis theory, the ceremony on the 22nd for the celebration of the operation of Samsung Electronics' largest memory factory and the world's first 20-nanoscale DRAM mass production facility could have ended in a internal party. But with Chairman Lee Kun Hee's theory, the staff is again full of tension.

But Chairman Lee's concern was that the crisis and menace that was about to come was as large as a typhoon. The key points of his new crisis theory is this: they may be competitive in the memory semiconductor market in which they have been leading for ten years, but the threat that comes from the new non-memory semiconductors has not reduced.

Chairman Lee at the Samsung Electronics 16th Line Operational Ceremony and 20-nanoscale DRAM-Flash Mass Production event.

The biggest threat comes from dinosaur companies. Already typhoon-sized threats have started, and the competition is slightly different from the memory market. Apple, Samsung's biggest customer, has just thrown a direct hit to Samsung with a patent suit, and they have also changed their memory and AP dealers to someone else. And it is inevitable to fight against Intel, the biggest semiconductor company, in the CPU market that Samsung had just entered.

Every time Chairman Lee had presented a crisis theory, Samsung Electronics was able to overcome it by a quick response and strategic preparation. Chairman Lee's expression of crisis management was used because of this. Unlike earlier pessimistic crisis theories, this crisis theory starts from being positive. Chairman Lee's new crisis management has begun.

Samsung Electronics Co., Korea's tech behemoth, was the fifth most valuable firm among its global peers in terms of market capitalization, data showed Tuesday. The total market cap of the world's second-largest mobile phone maker stood at $136.9 billion as of Dec. 23, only trailing behind Apple Inc., Microsoft Corp., IBM Corp., and Google Inc., the four biggest IT firms in the world, according to the data compiled by local financial sources. Samsung's market cap surpassed that of the world's No. 2 software firm Oracle Corp. by $5.9 billion. Oracle's market cap was $30 billion bigger than Samsung's at the end of last year. Samsung also outstripped Intel Corp. by $12 billion, widening its distance from the world's No. 1 chipmaker from $6 billion a year earlier. Samsung Electronics' rise in market cap came on the back of brisk growth in its smartphone business and strong earnings. Its net profit reached the forecast-beating 3.44 trillion won ($3.09 billion) in the third quarter of the year and it is expecting a record high operating profit of nearly 20 trillion won for 2012. Its stock price has settled above the 1,000,000-won mark since Nov. 29. It finished at 1,066,000 per share on Monday. Meanwhile, South Korea's top automaker Hyundai Motor also saw its market cap rise 20 percent to $41.2 billion, ranking fifth in the world ahead of General Motors Co. of the U.S. Top steelmaker POSCO has remained the top cap in the global steel industry after beating the world's No. 1 ArcelorMittal in August, according to the data. (Yonhap)

Samsung's patent offensive against Apple hits snag Samsung Electronics Co.'s patent offensive against its rival Apple Inc. hit a snag after a Dutch court on Friday (Korea time) rejected the Korean firm's injunction to ban sales of the U.S. company's iPhones and iPads. The ruling by the district court in the Hague may pose problems for the world's No. 2 mobile phone maker embroiled in a worldwide legal battle with Apple over the fast-growing smartphone and tablet computer markets. Samsung, which had been on the defensive against its rival, had hoped that it could make a comeback in the dispute by claiming Apple had violated its third-generation (3G) mobile patent. Courts in the Netherlands, Germany and Australia have all sided with Apple and imposed temporary bans on Samsung products for infringement of user interface (UI) and design. Samsung has been moving to change its features to bypass these court rulings. The latest ruling said that Samsung is obliged to offer its 3G Internet technology to anyone in accordance with FRAND, the principle that dictates such information be shared in a "fair, reasonable and nondiscriminatory" manner, since the technology has been accepted as the industry standard. The court pointed out that Samsung had agreed in the past to offer its patents in accordance with the FRAND principle, which is a safeguard to prevent patent holders from denying market access to latecomers. Experts here said that the Dutch ruling, if accepted by other courts, could complicate Samsung's plans to take a hardline stance against Apple. "The nondiscriminatory clause may undermine Samsung's efforts to halt sales of the latest iPhone 4S in France and Italy," the source said. The source, however, said that although the Dutch court rejected Samsung's infringement suit, judges also threw out Apple's argument that it did not violate patents. The court said that if the two companies fail to come to a reasonable settlement on 3G patent rights use, Samsung has the right to take legal action again. This could permit Samsung to receive payment from Apple in the future. The South Korean tech giant, which makes the popular Galaxy series of smartphones and tablet PCs, has already filed a legal suit to receive payment for use of its patents in the Netherlands. If it were to win the suit, it would receive payment for all 3G products that use its patent, including those sold in the past. Related to the latest development, a Samsung executive said that every effort will be made to win the legal fight to receive royalties. In addition, he said that while the Dutch court upheld the FRAND principle, this may not be the case in other countries that view patent protection differently. The company is currently engaged in around 20 lawsuits worldwide in Asia, Europe and the United States. (Yonhap)   Samsung's 2012 operating profit to jump 28% to record high Korean tech behemoth Samsung Electronics Co.'s operating profit is expected to surge 28 percent on-year to an all-time high next year, analysts said Thursday. The world's largest supplier of memory chips and flat-screen TVs is forecast to rake in 19.98 trillion won ($17.36 billion) in operating profit in 2012, according to the median consensus of 25 analysts polled by FnGuide, a Seoul-based financial information provider. The median estimate beats Samsung's annual operating profit of 17.29 trillion won recorded last year. The 2010 operating profit was higher than in previous years thanks to a semiconductor boom. Samsung's annual operating profit is anticipated to drop this year, however, to 15.62 trillion won, according to the median analyst forecast, due to Europe's financial crisis and feeble global demand for televisions and personal computers. The firm is scheduled to release its earnings results for the last three months of this year in January. Growth in non-memory chip business and smartphone sales will propel an improvement in Samsung's 2012 earnings, analysts said. The Korean firm, once considered an also-ran in the smartphone market, overtook Apple Inc. in global smartphone sales in the third quarter and is likely to be the world's top vendor this year. "After cementing its dominance in memory chips, Samsung Electronics is quickly rising in the non-memory chip area as well and it has overwhelmed Apple in smartphones," Kim Sung-in, an analyst at Kiwoom Securities Co., said in a recent report. Kim was the most bullish analyst polled, forecasting Samsung's operating profit will reach 23.11 trillion won in 2012. Some analysts, however, forecast that Samsung's 2012 profit will fall short of its profit in 2010. Analysts at Daishin Securities Co. put an estimate for Samsung's 2012 operating profit at 16.82 trillion won. "The forecast gap stems from varying views on the semiconductor market," said a Daishin Securities analyst. "We expect global demand for semiconductors to continue to decline up until the first quarter of next year." (Yonhap)     Samsung’s business in Qatar booms Nair: focus on Smart TVs Samsung’s business in Qatar during the 2011 calendar year has closed with an estimated $17.5mn worth in sales of products including smartphones, tablets, TVs, home appliances, cameras, monitors and notebooks. “Between 2009 and 2011, Samsung sales in Qatar saw an average growth of 40% year-on-year,” Vinod Nair, general manager, TV Business, Samsung Gulf Electronics, said. The significant increase highlights Qatar’s transition into a more dynamic technology infrastructure as well as consumers’ preferences and adaptabilities towards new technologies. Samsung has the highest market share in Qatar in terms of value and volume and is the number one in the Smart TV LED market with 34% in global market share, he claimed. “We expect TV sales to continue growing along with an increased growth for the Smart TV industry, solidifying our market leadership in this category,” Nair said. In 2012, the Smart TV sector will see a bigger demand for regionally relevant content as well as diverse applications and features that enhance a user’s everyday life. “We will also see local Qatari content streamed across the globe through our Samsung Smart TVs soon as we continue to partner with regional companies to develop applications and regionally relevant content,” the official said. Earlier this year, Samsung witnessed high demand from regional companies who are looking to develop new applications and technologies to reach audiences at home. “Given this growing interest, Samsung will continue securing business partnerships in 2012 with the aim of providing locally tailored content and services to regional consumers,” Nair said. “Samsung will also continue to focus on how Smart TVs truly enhance consumers’ everyday lives by providing solution-based applications and entertainment applications to suit consumer lifestyles.” The global consumer electronics major will introduce more video on demand applications, where users can enjoy whatever content they want, on Smart TVs. “This way, users will not be limited to content offered by conventional satellite and broadcasting companies, since they will have access to a wide array of content sources via Samsung’s Smart Hub that enables easy browsing and availability of rich content. “And, as technology advances, we expect to see a growth in connected televisions, where content from TVs can be streamed onto handheld devices such as smartphones and tablets,” Nair said. The Samsung Gulf official said glassless 3D TVs will take a few more years to hit the retail market. Earlier this year, Samsung showcased a 55-inch glassless 3D TV prototype at the Flat Panel Display show in China. “However, more research needs to go into glassless 3D TV technology as we would like to provide the best experience for our consumers,” Nair added.