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Samsung’s difficult year has been well publicized. Sales have been lower than expected but of greater significance, the business has lost market share. This quarter earnings were some 60% lower in 2014 compared with 2013 and Galaxy S5 sales were 40% lower than Galaxy S4 sales the previous year: in the months after April, twelve million Galaxy S5s were sold compared with sixteen million Galaxy S4s the previous year. Some of the questions facing Samsung include, “Where did these four million device sales go?” and “What competitor stole a match on us?” The Galaxy S5 is not a bad device by any stretch but the innovations were perhaps too off-the-wall and impracticable: the Galaxy S5 has a fingerprint sensor that isn’t the best in the industry, and a heart rate monitor in a device far less manageable than a wearable wrist watch with the same sensor. There were a couple of compromises, too: that superb camera lacked image stabilization, the waterproofing technologies not only kept the liquid out, but the heat in too so the Galaxy S5 underperformed when being worked hard.
Samsung are working and have worked hard to readdress these issues, especially the last one. We’ve seen metallic handsets in the shape of the Galaxy Alpha series. And I’m sure that the technology “sore points” of the range will be addressed next year when the replacement models are launched. Meanwhile, according to the Wall Street Journal, it might be too little, too late for the boss of Samsung Mobile: Samsung’s current head of its mobile division is in danger of losing his job. High ranking executives live by the businesses’ stock price, reputation market share and growth opportunities. The current mobile division Chief Executive Officer, J K Shin could lose his title and this would mean he would have to step down from the co-CEO title of the wider business. He could be replaced by another co-CEO, B K Yoon, the current head of Samsung’s appliance and television business division. If this happens, B K Yoon could continue to manage the white goods side of the business and add in the mobile division.
This is not the strange idea that it first seems. We know that Samsung have been working on integrating their home appliances with their mobile products and Mr. Yoon is an internal champion of this process. We also know why; it’s because it’s one area of relatively untapped growth. Samsung are amongst a cluster of manufacturers working hard to gain a foothold in this arena and having a Chief Executive Officer with a clear focus on this objective could be very tempting by the Samsung Board of Directors.
It’s not unheard of for executives to be given the chop after a difficult year. When this happens, sometimes – but not always – there are already foundations put into place for the following years. The Samsung Galaxy Alpha build and rumors of a significant reduction in handset models for 2015 are clues to this. A new manager will rarely leave this untouched but instead will exert his or her authority over the existing projects to realign them into the wider view. This takes time; even if Samsung change the mobile division leader today, I expect it will be too late to change the planned 2015 flagship devices. We may see a steer, but it is not so likely that Samsung will delay the launch by a few months. Then again, perhaps that’s exactly what the Galaxy line needs?