Samsung has evolved into one of the two key players in the global consumer electronics industry, challenging even arch-rival Apple as the leading pace-setter. In many ways, it has so far been to the early 21st Century what Sony was in the late 20th, but has far surpassed the Japanese company's achievements. More than any other Korean business, Samsung fully embraced Western corporate philosophy and threw itself aggressively into North American and European markets, causing more established rivals - not least Sony - to stumble dramatically. However the environment remains challenging. South Korea continues to experience economic and political problems, a situation exacerbated in Samsung's case by the fact that many Koreans actively resent the group's commercial dominance at home even while they are proud of its international profile. The group also faces stiff competition in key areas from yet another rising tide of Asian rivals, this time from China. The flagship of the group is Samsung Electronics. It is notionally an independent company, although other Samsung companies and the founding family between them control a combined stake of at least 15%. Samsung Electronics operates across three divisions of consumer electronics (ranging from TVs to refrigerators and washing machines), IT & mobile communications (primarily mobile phones, but also notebook PCs), and what it calls device solutions, comprising memory chips, LCD screens & other display panels and semiconductors. In its most important segment of smartphones, it has been the global leader since late 2011. Market share in 2018 was around 20%. (See latest figures here). In 2017, it overtook Intel to become global #1 in semiconductors. It has been the global leader in TVs since 2006. Revenues from Samsung Electronics reached a record high in 2018 of around $221bn, with net income of approx $40.3bn. Yet the Samsung umbrella also covers a huge range of other businesses in sectors as diverse as financial services, fashion, tourism, pharmaceuticals, theme parks and automobiles (through a minority stake in Renault Samsung Motors). Samsung Electronics is just the best known of more than 80 separate but affiliated companies in Korea alone, 17 of them publicly listed in their own right. Combined revenues are well over $300bn. The empire is overseen by the founder's grandson Lee Jae-Yong, reinstated as vice chairman in 2018 following a jail term for corruption. His father Lee Kun-hee retains the title of group chairman but has been bed-ridden for several years following a heart attack. Samsung Electronics is now run by three co-CEOs, Kim Ki-nam (components), Kim Hyun-suk (consumer electronics) and Koh Dong-jin (mobiles). Lee Sang-hun is group chairman.
Capsule checked 24th January 2019
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Adbrands Daily Update 21st Feb 2019: Several handset manufacturers have been experimenting with the concept of a folding screen device. Samsung will be the first to bring it to market towards the end of April. This week, it unveiled five devices including the Galaxy Fold, a tablet-sized screen that folds in half like a wallet, and also has a second, traditional-sized display on half of the outer frame. It also has no fewer than six cameras built-in. All that cutting-edge tech comes at a price, though: $1,980, or a third again on the cost of Apple's most advanced iPhone. Meanwhile the Samsung Galaxy S10 will be available in four different versions, depending on screen-size, the number of cameras and whether they are 5G-ready. Samsung hopes the wider variety of its new offer will help to slow the steady decline in global smartphone sales. Many commentators, though, fear the reverse is more likely given the ever-steeper prices being asked for new devices.
Adbrands Daily Update 31st Jan 2019: Looks like the smartphone boom is over, at least for established leaders Samsung and Apple. Market watcher IDC reported sharp declines for both in the final quarter of 2018, as well as a 5th consecutive decline in global quarterly shipments for the market as a whole. Samsung came out on top for the year at 20.8% global share but it faces immense competition in 2019 from Huawei, whose volumes soared by 44% in the final quarter, compared to a 6% decline for Samsung and 12% fall for Apple. Two other Chinese challengers, Oppo and Xiaomi, were also up in the final quarter but rather more modestly. The top five manufacturers accounted for over two-thirds of global volumes in 2018, leaving other companies to scrabble for scraps of the remaining market. The research coincided with weak 4Q performance at Samsung. Net profit slumped by almost a third as a result of what the company called "unfavorable business and macroeconomic factors". Even profits from the group's massive semiconductors business were down sharply. It marked the Korean giant's first decline in quarterly profits since the disastrous Note 7 recall in 2016. For the year Samsung Electronics reported revenues of KWon 244 trillion ($221.5bn) and net income of KWon 44.3tn ($40.3bn).
Adbrands Weekly Update 8th Nov 2018: Market watcher IDC reported a 6% decline in smartphone shipments in 3Q, the 4th consecutive year-on-year decline. The biggest loser was Samsung, which suffered a shock 13% slide in volumes to 72m devices, even though it retained a clear global lead over any other manufacturer. Just as shocking, perhaps, was a giant leap by Huawei which seized the #2 position by global volumes, with a 33% year-on-year increase to 52m units. That displaced Apple, which edged up by just 0.5% to 47m devices. It has two Chinese challengers breathing down its neck: Xiaomi was up 21% year on year to 34m units, ahead of countrymate Oppo at 30m. The top five manufacturers continued to increase their overall share at the expense of other handset makers.
Adbrands Weekly Update 1st Nov 2018: Samsung reported its highest ever quarterly profit, the equivalent of $11.5bn, well above analysts' expectations, on revenues worth $57.3bn. Yet all the gains came from the group's memory chips and displays divisions. Revenues from mobile phones sagged by 10% (to around $22bn) on flat volumes, while handset profits plunged by more than a third as a result of higher promotional spending. There were worrying signs too that the good times in memory chips may also soon come to an end as the market reaches saturation point.
Adbrands Social Media 5th Sep 2018: "No Crisis". Running out of mobile phone battery is definitely one of those First World problems. Leo Burnett's Israel office seeks to put those concerns into perspective with an entertaining musical number on behalf of Samsung. It just goes to show how egalitarian Leo Burnett's management of the Samsung account is. Far from being concentrated at a few global hubs, and then repackaged for individual markets, creative output is often made locally. As a result, even Burnett's smaller outposts get a chance to show what they're made of. If it wasn't in Hebrew, this particular spot would be fully deserving of a wider airing. Maybe they could consider remaking it in English.
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