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There was a big shakeup today at Samsung. Longtime exec Choi Gee-sung (pictured) has relinquished his role as chief executive. He first joined the company in 1977.
While he does have a successor, executive Kwon Oh-hyun, the company is taking this opportunity to put up some walls between the consumer and components sides of the business, meaning the Samsung is continuing to optimize for profits from chip manufacture, especially for the ever-profitable Apple, and OLED displays.
“Despite difficult business environments, including seasonal low demand for major products such as PCs and TVs amid a global economic slowdown, we achieved record quarterly results based on our differentiated products and technology leadership,” said Robert Yi, senior vice president and head of investor relations, in a statement.
In the new regime, Kwon Oh-hyun will maintain his control over the chip and display-component business, which he has overseen for the past several years, as well as Samsung’s corporate affairs.
The mega-manufacturer’s consumer devices divisions, however, won’t even report to the new CEO. If there are conflicts between the two different sides of the business, Samsung chairman Lee Kun-hee will have the honor of playing Solomon.
It’s interesting to note the company’s corporate emphasis on the importance of its components business. After all, Samsung seemingly can’t shut up about how well its mobile phone business is doing.
However, today’s news remind us about Sony’s massive corporate restructuring, an epic saga that left 10,000 people jobless and cost $1 billion to complete, but which was intended to leave the company leaner, meaner, and more competitive than ever after a record $5.7 billion in annual losses for 2011. That loss makes 2011 the lowest point in the company’s 66-year history. We do know that tax hits and “acts of God” (the devastating earthquake and tsunami in Japan, for example) were at least partly to blame.
On the other hand, while Samsung did record $665 million in losses for 2011, it bounced back quickly with around $4.45 billion in profits for the first quarter of 2012 alone.
“Despite difficult business environments, including seasonal low demand for major products such as PCs and TVs amid a global economic slowdown, we achieved record quarterly results based on our differentiated products and technology leadership,” said Samsung investor relations chief Robert Yi at the time.