Samsung expects mobile biz to recover quickly, plans second developer conference

Samsung Electronics expects its mobile business to bounce back in the months ahead, a top company executive said, especially with the launch of its latest flagship phablet device, the Galaxy Note 4. Meanwhile, even as the conglomerate shifts software engineers from its mobile unit to other parts of the company, the world's largest smartphone maker is gearing up for its second annual developer conference this fall.

D.J. Lee, president of the strategic marketing office at Samsung's mobile business, told a press conference that he expects the business will recover ground thanks to a strong foundation and the firm's technical capabilities, according to Reuters. Lee also said the Note 4 smartphone will likely lead to significantly better sales than its predecessor, noting stronger pre-orders thus far. However, he didn't offer a sales target for the phone.

In the second quarter Samsung saw sales and operating profit at its key mobile unit fall amid intensifying competition from low-cost Chinese rivals and increasing questions from investors about Samsung's ability to maintain its position as the No.1 handset and smartphone maker. Mobile sales make up the vast majority (97 percent) of sales in Samsung's IT & Mobile Communications division, and sales in the division were down 21 percent year-over-year and down 12 percent from the first quarter. Samsung said it would face challenges in the second half of the year but would focus on the Note 4 along with "new mid-to-low-end models with more advanced features and competitive pricing."

Meanwhile, Samsung confirmed to the Wall Street Journal that it will transfer around 500 software engineers from the company's mobile unit to its consumer electronics, TVs, network, printer and its corporate software R&D divisions. The company said in a statement that it is doing so "to further strengthen the company's overall software prowess." The focus will be "to enhance our competitive edge in the Internet of Things (IoT) industry and increase synergies for the Tizen platform," it said.

Samsung has been using the open-source Tizen platform in some of its wearable devices, but has indefinitely postponed the launch of the Samsung Z, the first commercial Tizen smartphone.

Samsung did not say how many engineers will remain within the mobile unit after the changes, the WSJ reported. As of 2013, Samsung had a total of 40,506 software engineers, up from 33,449 in 2012 and 27,889 in 2011, according to the company.

In November, Samsung will host its second annual developer conference in San Francisco. The event, from Nov. 11-13, will focus on smart health, wearables, virtual reality and the connected home--in addition to mobile, of course.

In an interview with FierceWireless, Curtis Sasaki, senior vice president of Samsung Media Solutions Center, said the company will focus on health and wellness applications, especially related to wearables. The firm will also focus on the smart home, building on its acquisition of SmartThings, a connected home software platform. Samsung will build a live connected home at the Moscone West convention center and will show developers new code to let them integrate apps with connected home appliances, Sasaki added.

Sasaki, who will act as an emcee for the conference, said Samsung is not shying away from the Tizen platform. "We actually have Tizen tracks at the event," he said, noting that Samsung uses Tizen for devices like its new Gear S. He said Samsung will be showing off a Tizen software development kit for TVs at the conference.

As for whether Samsung will make any new firm announcements about Tizen on smartphones, Sasaki said, "we'll see."

Last year Samsung had hoped to get 800 developers and wound up with 1,300 at its inaugural conference. This year, Sasaki said, Samsung hopes to more than double the 1,300 attendance figure.

Samsung said the Note 4 will be available in South Korea Sept. 26 and in 140 countries by the end of October. Verizon Wireless (NYSE: VZ), AT&T Mobility (NYSE: T), Sprint (NYSE: S), T-Mobile US (NYSE:TMUS) and U.S. Cellular (NYSE:USM) will all launch the Galaxy Note 4 when it debuts in the U.S. in October. The 5.7-inch Note 4 is also expected to beat Apple's (NASDAQ: AAPL) new iPhones to market in China.

According to Bloomberg, Samsung will sell the Note 4 on China Mobile, China Unicom and China Telecom by Sept. 30, before Apple can get its 4.7-inch iPhone 6 and 5.5-inch iPhone 6 Plus certified by regulators and in stores in the world's largest smartphone market. However, both Samsung and Apple face challenges in China as carriers cut smartphone subsidies, thus raising the cost of phones for consumers.

"The recent business condition is seen as temporarily difficult," Lee said, according to Bloomberg. "There are some subsidy cut movements detected in overseas markets as well, so the overall market may shrink a bit and may have a temporary impact."

For more:
- see this Reuters article
- see this Samsung release
- see this SFGate article
- see this WSJ article (sub. req.)
- see this Samsung post
- see this Bloomberg article
- see this ZDNet article

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