SEOUL, KOREA -- The global economic recession does not seem to daunt Samsung. In fact, the company is determined to use its current position as a world leader in electronics in order to outproduce and outsell its competitors in the year ahead.
In mid-December, Samsung announced a widely anticipated reorganization, which addresses the conflict of interest among its many tentacles in the backdrop of the company's ongoing patent war with Apple. Samsung Electronics is now divided into Digital Media Communications (DMC) which will oversee finished, consumer goods such as smart phones and tablets, and Devices Solutions (DS) for its component products such as LCDs and memory chips. CEO Choi Gee-sung, who previously headed the entire company, will now oversee the DMS division.
At its recent global strategy meeting where its new chief management was present for the first time, CEO Choi Gee-sung outlined an aggressive strategy for ‘’high-speed growth’’ for 2012, at a rate much higher than what the market expects. The company plans to double its production of smart phones and smart pads, and has set a milestone for producing not less than 50 million units of television sets for 2012. With the industry on a tireless march towards convergence, Choi was quick to point out the significance of the reorganization to the employees. “With the proliferation of smart devices, the reshuffle in the electronics industry is expected due to the break-down of barriers. We must prepare for the uncertainty of the ongoing global recession, with firm market leadership and risk management.” Choi also emphasized Samsung’s successes in 2011. “Despite the global recession, we were able to maintain satisfactory growth, especially in smart phones, which made significant growth in sales in emerging markets in Africa and the Middle East.”
In cell phones, the company has set a sales target of 450 million units, up from 120 million in 2011. Samsung became the most profitable mobile phone maker by revenue in the third quarter surpassing Apple, but still trails Nokia by volume. If it reaches its target, Samsung will also overtake Nokia’s lead. For the fourth quarter of 2011, cell phone sales are expected to reach 100 million units. The company announced on December 29 that it has already sold more than 1M units of Galaxy Note, launched just two months ago. Samsung projects that 40 percent of its sales in cell phones in 2012 will be from smart devices, an increase of 125 percent from 2011.
For smart pads, the sales target is 250 million units, up 150 percent from 100 million units in 2011. After redesigning its Galaxy Pad, Samsung regained entry into Australia at the end of November, a major victory for its tablets against its ongoing patent war against Apple. Germany is also likely to favor Samsung’s redesigned Pad, where a new hearing is scheduled for February 9.
As for TVs, Samsung aims to grow its sales by more than 10 percent, where the company is the undisputed leader. Yet this goal is extremely ambitious considering current market conditions. Samsung will be looking especially towards expanding its sales of smart TVs, and will be focused on refining premium TVs such as OLED, Google, 3D, and LED TVs.
For 2012, Samsung’s priorities are: to create more value through product differentiation, to strengthen its competitiveness through expansion, and to improve its risk management of uncertain economic conditions. The DMC division will look especially towards developing its software business by building its own operating system for its hardware and will be recruiting the world’s best developers. Samsung will continue to expand its mega-enterprise, through exploring early entry opportunities into multiple sectors: medical equipment, B2B solutions, services and marketing, just to name a few.
