Samsung Mobile CEO Out As Smartphone Sales Sag - InformationWeek
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12/1/2015
12:20 PM
Eric Zeman
Eric Zeman
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Samsung Mobile CEO Out As Smartphone Sales Sag

The change in leadership reflects Samsung's loss of faith in J.K. Shin after sales of the Samsung Galaxy S6 fell far short of expectations.

Samsung Galaxy Note 5, S6 Edge+: Side By Side
Samsung Galaxy Note 5, S6 Edge+: Side By Side
(Click image for larger view and slideshow.)

There's no doubt that new blood is needed at the helm of Samsung's sagging smartphone business. While Samsung is still the worldwide leader, the company has lost market share over the last year due to poor sales of its flagship smartphones. That's why today J.K. Shin is out and Dongjin Koh is in as the company's new chief of mobile.

Koh will take over day-to-day management of Samsung's smartphone business, replacing Shin, who remains Co-CEO and had served as the company's mobile communications business since 2009.

Samsung's smartphone business is being squeezed at both ends. It has failed to compete at the high-end of the market against Apple since the Sept. 2014 arrival of the larger iPhone 6 and 6 Plus). It is also being pummeled at the low-end of the market by upstart Chinese manufacturers, such as Xiaomi and OnePlus. It all started going south with the 2014-era Galaxy S5.

(Image: Petar Chernaev/iStockphoto)

(Image: Petar Chernaev/iStockphoto)

Samsung enjoyed phenomenal success with the Galaxy S2, S3, and S4 smartphones, which has sold more than 40 million, 60 million, and 40 million units, respectively.

Each year, the revised flagship handset convinced more people to buy them thanks to their big screens, good cameras, and advanced software. These handset all retained several key features that power users demand: support for memory cards and removable batteries. More to the point, they were significantly larger than Apple's then-smaller selection of iPhones.

The Galaxy S5 improved all these features, but it was an iterative update at best. Consumers were not so quick to jump on the Galaxy S5. Sales leveled off and starting trending downward, which forced J.K. Shin to go in a different direction with the Galaxy S6.

The S6 is a masterpiece, but apparently not want consumers want. It traded in Samsung's cheap plastics for fine glass and metal. It dropped support for storage cards and removable batteries, and instead added wireless charging. It is sleek and powerful, but pricey and breakable. It has not been the hit Shin and Samsung both needed.

Samsung asked Shin to cede the day-to-day management duties of the smartphone business to Dongjin Koh, who has served as a researcher and engineer at the company and played a role in shaping the technology in the Galaxy S6 and Note 5. Shin will remain in a leadership role, but will be relegated to finding new businesses opportunities and making plans for long-term growth. In other words, Shin is being sidelined without being fully fired.

[Read Samsung Galaxy View: Huge 18-Inch Android Tablet Debuts.]

Some analysts question Samsung's choice in Koh. "Koh is basically the same person as Shin," said Chang Sea-jin, business professor at the Korea Advanced Institute of Science and Technology, to Reuters. "There is no real change and Samsung appears to be continuing on the hardware-centric path." Chang adds that Koh's appointment doesn't go far enough, something that cannot be assessed for some time.

Samsung has released its new S class handsets in the spring each year. There is speculation the company will push the Galaxy S7's debut up to the Consumer Electronics Show in January. The S7, already well into its design cycle, is still the brainchild of J.K. Shin. Koh's impact won't be visible until we're well into 2016.

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Eric is a freelance writer for InformationWeek specializing in mobile technologies. View Full Bio
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DDURBIN1
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DDURBIN1,
User Rank: Ninja
12/2/2015 | 10:40:56 AM
Not optimistic about the change
The S5, the S6 and the Tab S products all have not met expectation for one primary reason, cost cutting is higher on the "to do" list than customer preferred features while offering above average pricing.  A string of three product lines with less than expected sales changed the mobile division's leadership but still may not change the tide in Samsung decision priorities.  The S7 and Note 6 are already shaping up as "less than expected" sales contenders.
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