Samsung Electronics sees tough year with trade risks
Kim Ki-nam speaks during the company’s annual general meeting in Seoul, South Korea. Reuters
The world’s biggest memory chipmaker reiterated its forecast of a weak 2019 as shareholders gathered for its annual general meeting in Seoul, citing a slowdown in demand for memory chips.
“We are expecting many difficulties this year such as slowing growth in major economies and risks over global trade conflicts,” Co-Chief Executive Kim Ki-nam told the meeting.
Samsung is seeking new growth in areas such as network equipment manufacturing as sales of its mainstay chips and smartphones begin to drop.
The company would continue to make bold investments in semiconductor manufacturing in the face of stiffening Chinese competition, Kim said.
Shareholders are expected to vote on the appointment of board directors.
Samsung Electronics Co Ltd said on Wednesday its new Galaxy flagship smartphones were selling well in China and it was confident it could reverse the recent slump in its fortunes in the world’s biggest smartphone market.
Samsung’s market share has plunged from about 20 per cent in 2013 to less than 1 per cent currently as fast-growing Chinese rivals such as Huawei Technologies Co Ltd proved more agile in responding to the latest trends. “It has been tough in China in the last two years. We have changed everything from our organisation and people to distribution channels,” Samsung Electronics Co-Chief Executive DJ Koh told shareholders at the firm’s annual general meeting.
“I think our flagship and mid-price models, these two products will bring a lot of change to the China market... I am positive.”
While Samsung remains the world’s largest smartphone maker with nearly a fifth of global unit sales, it underperformed a slumping market last year and has closed one of its mobile phone manufacturing plants in China.
The upbeat outlook for mobile devices in China contrasts with the company’s more pessimistic take on 2019, with trade tensions, weak economic growth and softer demand for memory chips expected to weigh on operations.
“We are expecting many difficulties this year such as slowing growth in major economies and risks over global trade conflicts,” Co-Chief Executive Kim Ki-nam told the meeting.
Some shareholders vented their frustration and took the microphone to berate executives.
“If you’re paid a lot of annual pay, you should work harder. I’m asking the management to do good work,” one shareholder told the board.
The meeting drew more than double the usual crowd following a stock split last year which made it easier for retail investors to own Samsung stock. There was a long queue around the Samsung building to get in, and some shareholders complained they were getting hungry as the meeting dragged on.
Samsung is seeking new growth in areas such as network equipment manufacturing as sales of its mainstay chips and smartphones begin to drop.
As expected, shareholders voted to approve the appointment of board directors.
Meanwhile the Samsung Electronics Co Ltd on Feb.20 unveiled a nearly $2,000 folding smartphone in a bid to top the technology of Apple Inc and Chinese rivals and reignite consumer interest amid slumping sales.
The Galaxy Fold will go on sale on April 26 and take advantage of new and faster 5G mobile networks. The device looks similar to a conventional smartphone, but then opens like a book to reveal a display the size of a small tablet at 7.3 inches (18.5 cm).
The device “answers skeptics who said that everything that could be done has been done,” DJ Koh, chief executive of Samsung Electronics, said at an event in San Francisco. “We are here to prove them wrong.”
Samsung remains the world’s largest smartphone maker with nearly a fifth of global unit sales but underperformed a slumping market last year. Chinese rival Huawei Technologies Co Ltd - whose Mate series of phones also command premium prices - gained market share. Other Chinese makers like Xiaomi Corp have also been increasing prices, leaving Samsung to defend its turf against upstart rivals in addition to its longtime foe Apple.
With the foldable phone, Samsung is going on the offense on two fronts in the smartphone race: It is offering an eye-catching new feature with the big, bending screen and the first 5G connection in a premium phone, a feature analysts do not expect Apple to match until 2020.
Samsung is also making improvements to its flagship Galaxy S devices and plans to offer a 4G version of its folding phone.
Reuters
