Samsung Electronics is changing its mobile marketing chief less than a month before it is expected to debut the next version of its flagship Galaxy S smartphone line.
Kim Seok-pil, who has been Samsung's marketing chief for a little more than a month, stepped down from the position, according to reports from Reuters and the Wall Street Journal. Both reports, citing unnamed sources, said Kim's decision was due to health reasons, and he is expected to return to the company at a later time. Reuters said that his departure was unrelated to his performance.
Lee Sang-chul, who formerly ran of the company's Russian operations, will become the new head of strategic marketing for the mobile business, a Samsung spokeswoman told Reuters.
The reports come just as Samsung sent out invitations to an event on March 1, the day that the Mobile World Congress trade show kicks off in Barcelona, Spain. The invitation simply says, "What's Next," and it shows the outline of a mobile device with a somewhat curved screen.
Kim's main responsibility had been to oversee the successful rollout of Samsung's next Galaxy S phone, widely expected to be called the Galaxy S6. He had taken over from D.J. Lee, who had been a top lieutenant of Samsung co-CEO J.K. Shin. Lee left the company as part of Samsung's annual restructuring in December in which dozens of mobile executives were let go.
Samsung has come under increasing pressure in the smartphone business from Apple (NASDAQ: AAPL), Lenovo, Huawei and Xiaomi. Research firms put Samsung almost event with Apple in terms of fourth-quarter smartphone shipments. Apple reported shipping 74.5 million iPhones in the quarter; Samsung does not report its smartphone shipment numbers.
Samsung's strategy of building smartphones to cover every price point is coming back to bite the company as it faces challenges on multiple fronts, according to analysts. In the fourth quarter, sales in Samsung's key mobile segment fell 23 percent year-over-year and its operating profit plunged 64 percent from the year-ago period.
Samsung has said it will cut the number of new smartphone models it offers in 2015 by at least 25 percent--and possibly as much as a third--in a bid to slash costs and boost profits. That will put even more pressure on Samsung to make the Galaxy S6 a hit. Many professional reviewers and critics dinged the GS5 for not including any new, fancy features, and for its plastic design.
Samsung is expected to take a different approach with the GS6. "Through new materials, innovative design and differentiated features, competitive products will be introduced to drive smartphone sales, while efficiency will be enhanced across R&D and marketing to increase profitability," Samsung said in a statement as part of its fourth-quarter earnings announcement.
The new Galaxy S6 is rumored to feature a metal casing, and the invitation indicates the device could have a curved or flexible screen, similar to Samsung's higher-end Galaxy Note Edge phablet, which sports a thin display along one edge of the screen in addition to the main display. The GS6 is also widely expected to use Samsung's own Exynos processor. Past versions of the Galaxy S have used Qualcomm (NASDAQ:QCOM) chips for certain markets, including the United States, but last week Qualcomm cut its outlook for the second half of its fiscal year in part because it disclosed that its Snapdragon 810 processor "will not be in the upcoming design cycle of a large customer's flagship device," widely rumored to be the GS6.
Samsung will certainly be hoping that the Galaxy S6 performs better in the market than its predecessor did. According to a November report in the Journal, Samsung produced about 20 percent more Galaxy S5 units in 2014 than it did in 2013 for the Galaxy S4, based on a survey of its carrier partners around the world. As a result, when demand fell below expectations, inventory piled up, forcing Samsung to spend more on marketing to sell the units.
In a striking detail, the report said Samsung sold 40 percent fewer Galaxy S5 smartphones than expected, with about 12 million units sold to consumers in the first three months since April, compared with about 16 million units for the Galaxy S4. Samsung only sold more S5 units than S4 units in one market, the United States, which is the firm's largest.
- see this Reuters article
- see this WSJ article (sub. req.)
- see this Re/code article
- see this The Verge article
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