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Samsung Tightening Grip After Lower Than Expected Earnings

July 8, 2014 - Written By Cory McNutt

Samsung is a proud company in a proud country with a tradition of being number one – and when Samsung does not meet the high standards they set for themselves, it is time to shake management up.  It is no surprise that the Samsung Galaxy S5 was not the device they were hoping it would be – it was a good, solid device, but customers were expecting more…more flare, a different design, metal backing, QHD display, more RAM, etc.  Samsung delivered in no area that the consumers were hoping for – it had a better display, better software, a fingerprint scanner, and even a Heart Rate Monitor – but nothing that we really wanted.  Sales were not what Samsung expected – oh they told us it sold faster than the Samsung Galaxy S4, but what they didn’t tell us was that the Galaxy S5 was available in many more countries and there were immediate discounts and even Buy One Get One (BOGO) free.

They were not fooling any of us, but apparently they were fooling themselves – and that is what worries me.  There were so many websites crying for a new design and even some absolutely beautiful concept designs that were plastered all over the internet…we actually made it easy for them, but apparently, Samsung is not only proud company, but also a stubborn, ‘know-it-all’ company as well.  They seem to think they know what is best and refuse to listen to anybody outside the company…maybe until now.

Samsung not hitting their earnings call is like an alcoholic hitting rock bottom – maybe, just maybe, they will actually shake up management and make some changes. In a message to employees and executives, Samsung Electronics vice president Kwon Oh-hyun and Co-CEO Yoon Boo-keun and Shin Jong-kyun noted, “growth of our major products including smartphones and TVs are decelerating. Now is time to embrace mach management which calls for overhauling what we’ve been and working in different manners. Then we’ll be able to break through difficulties facing us.”

Samsung is not hurting by any means, but when analysts expected them to have operating profit for the second quarter of over nine trillion won ($8.9 billion) and they now are predicting less than eight trillion won – that is a ‘crisis’ to Samsung.  The problem for Samsung is that it will trickle down to their affiliates:  Samsung SDI, Samsung Electro-Mechanics and Samsung Display, which will result in economic hardships at home and abroad.  So many are employed by Samsung and are directly affected by what happens to the company.

Samsung is concerned about the third quarter, and decided to go into crisis mode to prevent any further decline.  Analysts are blaming Samsung’s poor performance because of the lack of sales of the Samsung Galaxy S5 – Samsung blames it on competition and other nation’s regulations used against them…and that is what worries me.  You know, they always tell you the first step to recovery is admitting that you have a problem.  Until Samsung admits they need to spice up their smartphone lineup it will be hard for them to really make a difference in their smartphone sales.

Please hit us up on our Google+ Page and let us know why you think Samsung’s is afraid to make changes in their smartphone design…as always, we would love to hear from you.