Vice chairman Han also defends mobile chief’s appointment as director
Samsung vice chairman and CEO JH Han apologized to customers and shareholders on Wednesday during the company’s annual shareholder’s meeting on the controversy around a preinstalled app on the Galaxy S22 series that allegedly limited performance.
Han said the company failed to appreciate customer concerns and bowed in apology.
The app, called Game Optimization Service (GOS), was designed to optimize smartphone performance during gaming, the CEO said.
Since the sales began for the Galaxy S22 smartphones last month, customers had made complaints that the app was limiting the performance of thousands of apps.
Samsung had denied this and said the app only affects gaming app but launched a software update last week that gave customers the option to prioritize gaming performance.
CEO Han said the company will listen to customers more closely to prevent such an issue from happening again.
Some shareholders during the meeting opposed the appointment of TM Roh, the president and head of Samsung’s mobile business, over the GOS issue.
But Han defended the appointment, saying Roh had been integral to the success of the Galaxy S22 series and foldable phones since 2014.
Meanwhile, Samsung executives declined to comment on whether rival TSMC has won the order over Samsung for Qualcomm’s next chipset.
But the company said it was seeing a stable increase in its yield rate for chips smaller than 5nm.
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Samsung Electronics has named Roh Tae-moon CEO of its key smartphone division, according to Bloomberg. He'll take over the position from DJ Koh, who will continue to head up Samsung's IT and mobile and communication arms. Roh is Samsung's third CEO in the last dozen years, as Koh was appointed in 2015 while Koh's predecessor JK Shin held the job for around six years.
Roh, who came on board with Samsung in 1997, helped develop the Galaxy device lineup and is supposedly a stickler for engineering and design. He'll reportedly try to bolster Samsung's reputation for quality after it stumbled over the past few years. Under Koh, Samsung was forced to kill the flammable Galaxy Note 7 and had to delay the Galaxy Fold due to issues with the display.
Roh's primary goals will be to shepherd foldable products into the mainstream and help Samsung expand in China and India. Roh is also known as a cost-cutter who outsourced smartphone production to better compete with aggressive Chinese rivals like Huawei, Xiaomi and Oppo. He'll be getting to work right away, as Samsung should be unveiling its new Galaxy S20 flagship series and possibly a second-generation foldable device at a February 11th event in San Francisco.
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SEOUL, Dec 7 (Reuters) - Samsung Electronics Co Ltd (005930.KS) will merge its mobile and consumer electronics divisions, the firm said on Tuesday, naming new co-chief executives in the biggest reshuffle since 2017 to simplify its structure and focus on the logic chip business.
Two co-chief executives, instead of three, will lead the South Korean firm as it pivots on the two business pillars of chips and consumer devices, including smartphones, to help lead the next phase of growth and boost competitiveness.
Samsung, whose Galaxy flagship brand helped it become the world's biggest smartphone maker by volume, is seeking to revive slowing mobile growth, whose profit contribution shrank to 21% last quarter from nearly 70% at its peak in early 2010s.
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Instead, its component business, led by chips, has become the most profitable, helped by a boom in data storage and a recent shortage of global semiconductor supplies.
The business generated nearly three-quarters of Samsung's 15.8 trillion won ($13.4 billion) operating profit last quarter.
Samsung said Han Jong-hee, the head of visual display business, will become a co-CEO, leading the newly merged division spanning mobile and consumer electronics as well as continuing to lead the television business.
Han has risen through the ranks in Samsung's visual display business, without experience in mobile.
It is not immediately clear what changes or divisions of labour were expected under Han, but analysts said the reshuffle could help Samsung tackle challenges such as offering seamlessly connected services between its smartphones and home appliances.
"In the long term, the biggest challenge is forming a platform of Samsung's own," said Lee Jae-yun, an analyst at Yuanta Securities Korea.
"Those businesses have to keep increasing connectivity between devices, but so far it hasn't been able to create a lasting platform with presence."
More immediate problems are a shortage of chip supplies, rising raw material prices, logistics difficulties, and competition from Apple Inc (AAPL.O) and Chinese rivals amid concerns about a slowing mobile market, analysts said.
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Kyung Kye-hyun, chief executive of component affiliate Samsung Electro-Mechanics (009150.KS) and a former head of the flash memory chip and technology team, was named co-CEO to lead the chip and components division.
Other high-profile promotions included naming as vice chairman Chung Hyun-ho, the head of a "task force" that analysts said co-ordinates decision-making in Samsung Electronics and affiliates, and which media have said works closely with Lee.
The re-organisation is the latest sign of centralised change at Samsung after Vice Chairman Jay Y. Lee was paroled in August after a bribery conviction.
"There may be more prompt execution of funds or decision-making," said Kim Sun-woo, an analyst at Meritz Securities.
Samsung Electronics last named new division heads in late 2017.
The group is focusing on areas from semiconductors, artificial intelligence and robotics to biopharmaceuticals, with plans to invest 240 trillion won ($206 billion) in these areas over the next three years. read more
Group flagship Samsung Electronics aims to overtake TSMC (2330.TW) to become No. 1 in chip contract manufacturing by 2030 by investing about $150 billion in logic chip businesses, including foundries.
Late last month, Samsung chose the U.S. city of Taylor in Texas for a planned $17-billion chip plant after months of deliberation, coinciding with Lee's first business trip to the United States in five years. read more
Shares of Samsung Electronics rose 1.6%, outperforming a rise of 0.4% in the benchmark index (.KS11).
($1=1,176.7300 won)
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Reporting by Joyce Lee; Editing by Miyoung Kim and Clarence Fernandez
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