SEOUL (dpa-AFX) - South Korean conglomerate Samsung Group on Monday maintained its top executives at their current positions, while rejiging management team as part of its annual reshuffle. The company was expected to make major changes at the top as Samsung Electronics Co. Ltd. (SSNLF) continued to lose money and market share at its flagship mobile phone business.
Many long serving executives from Samsung Electronics' IT and mobile (IM) division were expected to be moved to other divisions in the Samsung group based on performance evaluations. IM division's mobile solution center (MSC). The division encompasses the mobile business, the network business, and the mobile solution center (MSC).
The annual reshuffle has been smaller than expected as the group's long-time Chairman Lee Kun-hee, who takes major decisions, is currently recuperating from a heart attack. He was hospitalized in May following a heart attack. His only son, Jay Lee, is expected to assume the chairman's position soon.
The company has left the top executives at Samsung Electronics unchanged, with all the three division heads retaining their positions. Meanwhile, the company is said to have promoted three vice-presidents to presidents and promoted or relocated eleven presidents to other divisions or affiliates.
Samsung Electronics' mobile business head J.K. Shin, home appliance and TV business head B.K. Yoon, and component business head Kwon Oh-hyun remain in their positions. All the three also serve as co-CEO's of Samsung Electronics.
Shin, who was widely expected to be replaced, has recently been under tremendous pressure as profits at the flagship mobile devices business have been waning recently due to the company's smaller presence in the high-end market where U.S. rival Apple, Inc. (AAPL) operates as well as higher marketing expenses and intense competition from Chinese players. The IM division normally generates about 60 to 70 percent of the company's gross operating profits.
Samsung, the world's largest smartphone maker by shipments, has been continuing to lose market share to Apple as well as Chinese brands amid improving product quality from manufacturers such as Huawei Technologies Co Ltd., Xiaomi Corp. and Lenovo Group Ltd.
Apple is luring premium customers, while budget buyers are being lured by Chinese manufacturers with their feature packed cheap phones. Samsung's competitiveness in emerging markets is also being threatened by the rise of other low-cost smartphone makers.
The world's largest technology firm by revenue reported a net profit of 4.22 trillion won or $4.0 billion for the recent third quarter, nearly half from 8.24 trillion won in the prior-year quarter, and also lower than 6.25 trillion won in the preceding second quarter.
Operating profit for the IM division plummeted to 1.75 trillion won in the recent third quarter, from 6.75 trillion won in the year-ago quarter. Quarterly sales at the division declined 33 percent to 24.58 trillion won, with a 34 percent drop in mobiles devices on slagging sales of Galaxy smartphones and tablets, despite strong launches, amid stiff competition from Chinese brands.
Samsung shares are gaining 7,000 won or 0.54% in Monday's regular trading session in Korea and is currently trading at 1,294,000 won on the Kospi on a volume of 0.13 million shares.
Copyright RTT News/dpa-AFX