The head of Samsung Electronics Co.'s components business, in a surprise move, announced plans to resign, acknowledging that the firm faces an "unprecedented crisis" and is struggling to find new growth prospects. The development came after the South Korean tech giant said it expected another record-breaking quarter.
Samsung Electronics Chief Executive Kwon Oh-hyun, 64 years old, announced his plan to resign in a statement Friday. He will do so after his successor is named, according to people familiar with the matter, with a decision likely by the end of the year, the people said.
His decision to step away threatens to amplify concerns over a leadership vacuum atop Samsung, which is already challenged by the absence of its de facto leader, Lee Jae-yong, who was convicted in August for bribing South Korea's former president. The appeal trial for Mr. Lee, who has denied wrongdoing, started this week.
Mr. Kwon, who joined Samsung in 1985 long before it became a chips heavyweight, will also relinquish his vice chairman post by March, the company said. He had informed confidantes he felt he had accomplished all he had hoped to achieve in his career, according to people familiar with the matter.
He had been a steadying force and served as Samsung's public face while Mr. Lee has been away. In a statement, Mr. Kwon said he believed the company "needs a new leader more than ever," including young leadership, and a fresh start "to better respond to challenges arising from the rapidly changing IT industry."
A generation ago, Samsung was best known as a low-cost maker of home appliances. But in recent decades, the South Korean firm powered into new areas such as memory chips and smartphones.
The critical question -- especially with Mr. Lee behind bars and Mr. Kwon's planned departure -- is whether Samsung can identify what's next.
"We are hard pressed to find new growth areas right now from reading the future trends," Mr. Kwon said in his statement.
A key weakness, say industry analysts, is that the South Korean firm lags behind Silicon Valley in producing popular applications or software. Its new voice-activated digital assistant, called Bixby, was beset by numerous delays earlier this year. Tech rivals have also beat Samsung to market with home speakers and artificial-intelligence technology.
Even with its lucrative components business, sustaining success won't be easy. Samsung must fend off China's deep-pocketed push into memory chips, plus a potentially rejuvenated Toshiba Corp., which signed a contract last month to sell its memory-chip business to a group that includes Apple Inc. and Dell Technologies Inc.
Samsung's current advantage in flexible mobile displays, in which it holds a 97% market share, could be punctured once rivals gain the ability to mass produce the curved screens.
For now, Samsung, the world's largest maker of smartphones and memory chips, has delivered record earnings, allowing it to shake off Mr. Lee's legal battle and the fallout from last year's global recall of fire-prone Galaxy Note 7 devices.
On Friday, Samsung said it expected operating profit of 14.5 trillion South Korean won ($12.80 billion) for the three months ended Sept. 30, which would top the previous quarter's record of 14.1 trillion won. Samsung Electronics shares, which fell 1.5% Friday, are still up 50% this year.
The components unit, led by Mr. Kwon, is a big reason why. Samsung has pumped tens of billions of dollars into memory chips and displays, making the firm a go-to supplier -- even to its fiercest rivals.
In response to the Galaxy Note 7 fiasco, Mr. Kwon spearheaded a decision for Samsung to dramatically reduce the number of new endeavors it pursues a year, from typically about 100 projects to just half a dozen or so, according to a person familiar with the matter.
Mr. Kwon is one of three CEOs at Samsung Electronics, which divides itself into three major units focusing on mobile devices, electronic components and consumer electronics. The No. 2 person in the components division is Kim Ki-nam, 59, a veteran Samsung executive.
After Mr. Lee's bribery conviction in August, Mr. Kwon penned an internal memo to employees, calling the current times an "unprecedented challenge" and encouraged employees to continue working hard as they wait for "the truth to come to light."
Samsung's leadership ranks are stocked with executives who have decades of experience, so the firm should be able to find his replacement internally, said Mark Newman, an analyst for Sanford C. Bernstein.
"They've got a deep bench," Mr. Newman said.
Chinese telecom giant Huawei Technologies Co. launched a new chipset with built-in artificial-intelligence capabilities to power its next-generation smartphones and take on rivals Apple Inc. and Samsung Electronics Co.
Though Huawei is well known in the smartphone business, it is No. 3 world-wide behind Apple and Samsung. It is lesser known as a maker of chips for its own phones. The company says its new Kirin 970 chip will power its forthcoming Mate 10 smartphone, set to launch next month to compete against the coming 10th-anniversary iPhone.
Huawei's new chipset was unveiled Saturday at the IFA electronics trade show in Berlin. It comes as the company has been pouring resources into the more profitable high-end phone market, long dominated by Apple. Its current flagship phone, the P10, launched this year with a base price of $685.
The Shenzhen-based company has said the Mate 10 will have improved camera and battery life. It also said the new Kirin chipset will power stronger image-recognition abilities and other camera features on its phones.
While Huawei's rivals are likely working on chip upgrades as well, "making AI computation faster and more efficient will give Huawei an edge, if it can demonstrate improved performance or battery life when conducting everyday tasks," said Tim Coulling, analyst at electronics-research firm Canalys.
Huawei has been steadily gaining market share from rivals in the smartphone wars. In China, where Apple has been losing ground, Huawei recaptured the top spot from Chinese brand Oppo in the first quarter, according to Canalys.
Globally, it had 10% of the market in the first quarter, according to Canalys, behind Samsung's 23% and Apple's 15%. While it is a major player in Europe, its sales remain low in the U.S.
Samsung's on a streak of not copying the iPhone, with original features like curved edges and iris scanners actually outpacing innovation at Apple. But that could end with its upcoming Galaxy Note 8.
A new report from The Investor claims the Korean electronic giant's follow-up to last year's disastrous Note 7 will come with a pressure-sensitive screen. The screen technology is said to be similar to the iPhone's display, which has supported 3D Touch since the iPhone 6S launched in 2015.
The new display, which is able to detect how hard you press it, will be used to "replace all the functionality of a home button and open a hidden menu with shortcuts to different features."
It's unclear if the new screen will replace the thin pressure-sensitive area that only covers the bottom portion of the Galaxy S8's display. But it's better late than never since Android Nougat already supports the special displays.
Copying the iPhone's pressure-sensitive screen isn't even the worst part. The report also says Samsung's going to call it ... 3D touch. Oh boy, do you hear that? That's Apple's big scary lawyers getting ready to leap out from behind their desks and run straight to Samsung HQ.
Samsung will have to face the laughs of a billion Apple fanboys for being so unoriginal, but there might not even be a courtroom battle between the two tech titans.
Eagle-eyed readers will recall that Huawei's Mate S, the world's first Android phone to copy the iPhone and sport a pressure-sensitive display, also called its technology 3D touch (with a lowercase "t"). If Huawei can get away with the name, perhaps Samsung could, too.
Despite initial excitement, 3D Touch hasn't exactly become a must-use feature on iPhone. Apple has yet to announce a compelling feature that makes use of it. A long-press works just the same on iOS and Android devices that don't have pressure-sensitive screens.
There's not much else we don't already know about the Note 8. We know that it'll be announced on Aug. 23 and The Investor claims it'll launch on Sept. 15, which matches reports that the phone would launch in mid-September to beat the Apple's iPhone 8.
Several comprehensive leaks suggest the Note 8 will be a pricey beast of a phone. It'll reportedly come with a 6.3-inch display, Snapdragon 835 chip, 6GB of RAM, 128GB of storage, dual cameras that might offer even better optical zoom than the iPhone 7 Plus, and an S Pen with enhanced stylus features.
The one thing that won't get a significant improvement is battery life. Samsung's reportedly going with a 3,300 mAh battery, which is smaller than the S8+'s 3,500 mAh battery. It'd also be smaller than the Note 7's battery, which has the same capacity as the S8+.
The smaller battery might turn some Samsung fans off, but there probably isn't much to worry about. Battery capacity and longevity aren't always directly related. Software optimizations and power efficiencies from the chipset can make up for a smaller battery. Just look at the iPhone; iOS and Apple's custom A-series chips allow it to last just as long or longer than Android phones with bigger batteries.
Whatever Samsung announces later this month, it's sure to attract the world's attention. The company will no doubt boast about the phone's myriad new features, but all it really needs to do is make sure there aren't any explosions again. If the safe S8's anything to go by, then Samsung should be in good shape with the Note 8.
A Seoul court on Thursday sentenced a former South Korean health minister to two and a half years jail for his role in a corruption scandal that led to the impeachment and arrest of former president Park Geun-hye, Yonhap reported.
The ruling is one of the first from several ongoing trials that emerged from the scandal, including that of Park herself and Samsung Group chief Jay Y. Lee.
Moon Hyung-pyo, a former minister of health and welfare during the Park administration and subsequent chairman of South Korea's National Pension Service (NPS), had been indicted and arrested last December.
He was accused of abusing his authority as minister to pressure the NPS to cast a key vote in favour of the $8 billion merger of two Samsung Group affiliates, Samsung C&T Corp and Cheil Industries Inc in 2015. The health ministry supervises the NPS, which held a substantial stake in both companies.
The NPS supported the merger deal in 2015. The Seoul Central District Court said Moon had "severely harmed the independence of the NPS by pressuring it through health ministry officials", sentencing him to two and a half years in jail, according to Yonhap.
Moon had denied the charges.
Prosecutors have argued Jay Y. Lee and other former Samsung Group executives gave bribes to Choi Soon-sil, Park's long-time confidante, and in return, received political favors and government support for the 2015 merger, which prosecutors say transferred control of the key company to Lee from hospitalised patriarch Lee Kun-hee at the expense of other shareholders.
Jay Y. Lee, held in detention and undergoing trial on charges such as bribery and embezzlement, has denied all charges. Choi and Park, also in detention and undergoing trials on charges such as abuse of power and extortion, have also denied all charges.
Samsung Group leader Jay Y. Lee appeared at the South Korean special prosecutor's office for questioning on Monday as part of a wider investigation into an influence-peddling scandal that could topple President Park Geun-hye.
The special prosecutor has focused on South Korea's biggest conglomerate, accusing Lee in his capacity as Samsung chief of pledging 43 billion won ($37.31 million) to a business and organizations backed by Park's friend, Choi Soon-sil, in exchange for support for a 2015 merger of two Samsung companies. The funding included sponsorship for the equestrian career of Choi's daughter, who is under arrest in Denmark after being sought by South Korean authorities.
Park, Lee, Choi, and Samsung Group have all denied bribery accusations. Proving illicit dealings between Park or her confidantes and Samsung Group is critical for the special prosecutor's case that ultimately targets Park, analysts have said.
Park was impeached by parliament in December and South Korea's Constitutional Court will decide whether to uphold that decision. She has been stripped of her powers in the meantime. Lee arrived at the prosecution office in southern Seoul early on Monday in a black sedan, dressed in a dark blue suit and tie and flanked by Samsung Group officials and his lawyer. "I will once again tell the truth to the special prosecution," Samsung Group's third-generation leader told reporters before entering an elevator. He gave no details.
Outside the prosecutor's office, protesters held up signs calling for his arrest.
The special prosecution team said investigators were questioning two other Samsung executives as suspects. Both are officers of the Korea Equestrian Federation and have been questioned previously in the case.
One of those two, Samsung Electronics Co Ltd president Park Sang-jin, did not respond to reporters on his arrival at the special prosecution team's office. Lee Kyu-chul, spokesman for the special prosecution office, told a news briefing the office would decide soon whether to make a second arrest warrant request for the Samsung Group chief. He did not comment on other details, including what Jay Y. Lee, 48, during Monday's questioning.
Spokesman Lee said prosecutors would also consider whether to seek arrest warrants for four other Samsung Group executives identified as suspects. The prosecutor's office had previously said it would not seek arrests for any Samsung executives other than Jay Y. Lee.
In January, the special prosecution sought a warrant to arrest Samsung chief Lee after questioning him for more than 22 hours, accusing him of paying bribes to win the state pension fund's support for the controversial merger of Samsung C&T Corp and Cheil Industries Inc.
However, a Seoul court rejected that request.
Chang Choong-ki, deputy head of Samsung Group's corporate strategy office, known informally as its "control tower", was also questioned as a suspect on Sunday and returned home hours later.
Shares in Samsung Electronics were down 0.9 percent by 0600 GMT on Monday, compared with a flat wider market. "The issue will have limited impact on share prices, except if the worst-case scenario happens, since political issues previously did not have a big influence on share prices or earnings," said Bae Sung-young, a stock analyst at Hyundai Securities.