The Korea Herald

지나쌤

Change expected at Samsung to beat Apple, other rivals

By 김지현

Published : July 31, 2011 - 19:26

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Samsung is not a company used to being No. 2 in anything it does, but it appears to be falling behind in preparing for changing business surroundings.

At least, this is the case according to Samsung owner Lee Kun-hee who last week publicly castigated his company ― albeit indirectly ― by saying Samsung needs to get going in terms of attaining “soft (ware) power, first-caliber human resources and patents.” 
(The Korea Herald) (The Korea Herald)

At a product exhibition Samsung Electronics hosted on Friday, Lee said technology or patents deemed necessary for incumbent and future business is an investment, and therefore must be “relentlessly pursued.”

He also said an edge in software would decide the future of companies, as hardware has done so far, calling for Samsung to pursue software-related technology and “S-level” talent, indicating the highest-level of individuals.

Keeping them at Samsung is another challenge, Lee noted, saying some of the top people have left, unable to fit into Samsung’s tight-laced organization.

Lee’s measured yet resolute words came at a critical moment for the conglomerate, which is doggedly pursuing Apple in the smart device race.

Samsung Electronics’ Galaxy S 2 smartphone is now expected to sell better than Apple’s iPhones in the second quarter, but more challenges loom ahead, Lee pointed out.

For one, Apple continues to remain a top rival for Samsung, industry watchers said, as the California-based company is known for its ceaseless brainstorming to lead and shape new digital trends.

This is why Samsung’s current legal dispute with Apple over patent rights is such a critical issue for the domestic firm, watchers said.

“Samsung is out to cement its position as a top player in the global markets and show everyone that it will not be outdone by Apple,” one industry source said, declining to be named.

The first and second quarter performances of Samsung Electronics is another concern for Lee, sources noted, as they failed to measure up, especially considering the company enjoyed a record year in 2010.

While Samsung logged an 18 percent decrease in its net profit from a year earlier, Apple’s profit soared by over 120 percent.

Corruption is another issue Samsung is battling with, as seen in the recent scandal at Samsung Techwin, where the CEO stepped down over irregularities by employees.

In the aftermath, Samsung underwent a major reshuffling of its auditing team.

On top of all this, key Samsung units including Samsung Electronics are undergoing a government tax investigation.

Lee, known for speaking his mind in his rare media appearances, is sending a message to employees, urging them to pull through the current rough patch by excelling and preparing, Samsung officials said.

The senior business tycoon returned to the corporate frontlines in April, deciding to work directly from Samsung’s Southern Seoul office.

He recently marked his 100th day back after keeping busy over the summer with the successful pitch by PyeongChang City to host the 2018 Olympic Games.

By Kim Ji-hyun (jemmie@heraldcorp.com)