3-pronged formation

The headquarters of Samsung Electronics in Gangnam, southern Seoul

Samsung realigned to boost mobile, electronics business

Samsung Electronics will reorganize into three key units of consumer electronics, information technology and mobile and device solutions in order to better cope with the rapidly-changing market environments.

On Wednesday, the Suwon, Gyeonggi Province-based outfit announced that it had decided to adopt what the company calls a “three top system” by upgrading its finished-goods division formerly led by television chief Yoon Boo-keun.

Under the realignment, Samsung Electronics CEO and Vice Chairman Kwon Oh-hyun will handle its component businesses such as flat-screens and memory chips, while Yoon leads its finished-goods business.

Samsung’s mobile boss Shin Jong-kyun is now responsible for handling tablet, smartphone and computer businesses after the company decided to put the IT solution division under his wing.

For televisions, Yoon is tasked with leading its printing solutions business. “We need to simplify our units and to put more focus on profitable businesses,’’ said company spokesman Shin Young-june.

“By ordering Shin to handle the printer business, Samsung is going to further solidify its top-two system in finished goods. Yoon and Shin will compete with each other but the two executives will have more authority,’’ said Samsung executives contacted by The Korea Times, asking not to be identified.

By division, the company’s consumer electronics unit will run televisions, home appliances, printing and medical equipment, while the handset division will look after networks, cameras and content development. Kwon has been asked to manage semiconductors and various technology centers, according to Samsung in a statement.

“Samsung is doing very well in televisions, however, we should do well in printers, cameras, networks and medical equipment, which we have identified as future cash-generators as well. Without change, we won’t survive in the competitive and rapidly-changing markets,’’ said one Samsung executive directly involved with the matter by telephone.

The reorganization comes after the firm’s smartphone business has seen explosive growth helped by stronger demand for its Galaxy line of devices, meaning Shin has proved himself as a game changer within Samsung.

The company’s computer business previously managed by Nam Seong-woo has so far failed to yield any visible returns despite heavy investment. Samsung said it won’t completely drop its PC business but stressed that it will invest in some strategic models for “quality growth’’ not “quantity growth.’’

In a related note, Samsung has created an “open innovation center.’’ It will only handle small-sized mergers and acquisitions and hire talented technicians.

Yoon and Shin will attend the upcoming International Consumer Electronics Show (ICES), which will in early January in the U.S. desert city of Las Vegas and will unveil new business strategies during a dinner meeting with the South Korean media.

Meanwhile, Samsung said it will invest more for finished-goods next year, though the spokesman declined to unveil specifics citing the sensitivity of the issue.

The company is expected to invest some 28 trillion won in facilities next year, which is little unchanged from this year’s estimated 27.5 trillion won. But it said the investment scale will be subject to market situations and demand.

“Samsung’s top-down manufacturing system is proving that it is effective amid an uncertain business outlook,’’ said the unnamed Samsung executive. <The Korea Times/Kim Yoo-chul>