Samsung's new CEO focuses on time to market
Samsung has named a new CEO, its second new boss in less than two years, as part of a reorganization primarily geared to getting products to market more quickly.
And as the Nokia-Palm merger rumors continue to flurry, some analysts are joining in with speculation that Samsung could bid for RIM next year.
All the handset majors are trying to reduce the long cycle of getting a new phone to the market, in order to respond more quickly to rapidly-changing user requirements, and to fend off the challenge from low-cost ODMs using “out-of-the-box” reference designs.
Squeezing time to market is especially important for a company like Samsung, which relies on launching large numbers of different handsets so that it can target every market and user profile, but also needs to address the high costs this involves. It has already streamlined its supply chain and this is expected to intensify under new CEO Geesung Choi.
Of course, the objective is not confined to handsets but also covers Samsung's other key businesses in chips, screens, consumer electronics and so on. But a further narrowing of the gap with Nokia in phones is one of the company's major goals for 2010, having increased its share impressively this year - in some areas, notably Nokia's western European heartland, at the expense of the might Finns.
Geesung Choi takes over from Yoon-Woo Lee, who will become chairman. He has been CEO since May 2008, and is an engineer, former CTO, and 40-year veteran of Samsung. Choi previously served as the head of Samsung's digital media division and before that ran the telecoms equipment unit.
Reflecting the new sharper focus on operational efficiency, Samsung has created a chief operating officer post for the first time, which is taken by Jay Lee, formerly a senior vice-president. And there is also a new CFO, Ju-Hwa Yoon, formerly head of the corporate audit team.
The reshuffle echoes Nokia's recent executive changes – also geared to improve efficiencies and time to market – with the appointment of CFO Rick Simonson to head the mobile phones unit and overhaul the logistics side.
The broader aim of Samsung's new structure is to make its various units more autonomous, which should also reduce time to market and increase agility. Each division will now have its own president and CFO, and there will be a flatter structure - seven independent companies reporting directly to the executive team, rather than ten divisions split between two business groups (digital media and device solutions), as now.
Subsidiaries outside South Korea, responsible for components such as semiconductors and LCD panels, will continue to operate as fully independent entities separate from Samsung's IT and consumer electronics subsidiaries, the firm said. Samsung also announced it would adopt global accounting principles, the International Financial Reporting Standards, beginning with the first quarter of 2010.
Meanwhile, web site 24/7 Wall Street is rounding up the “hottest” M&A rumors of the moment as the year ends. Number seven on its list of 12 is Samsung purchasing RIM. The justification is that the Korean wins strongly on feature phones and high end media phones, but needs a credible smartphone play, which it could gain overnight by taking on RIM.
The analysts say that, as RIM comes under increasing competitive pressure from Apple, Google and a rejuvenated Nokia, it “will not be independent in a year”, and that Nokia and LG could also make a bid. It will not be a cheap purchase though, with a market cap of $36 billion and revenue last quarter of $3.5 billion.
[Source: Rethink Wireless]