Samsung Electronics

Samsung Electronics Co. Ltd.
Formerly called
 Samsung Electric Industries (1969–1988)
Public
Traded as
ISIN KR7005930003
Industry Consumer electronics
Semiconductors
Home appliances
Founded 13 January 1969 (1969-01-13)
Headquarters Yeongtong District, Suwon[1], South Korea
Area served
 Worldwide
Key people
 Lee Kun-hee
(Chairman)
Lee Jae-yong
(Vice chairman)
Kwon Oh-hyun
(Vice chairman and CEO)
JK Shin
(President and CEO)
Products See products listing
Revenue Decrease ₩201.870 trillion (2016)[2]
Increase ₩29.240 trillion (2016)[2]
Profit Increase ₩22.730 trillion (2016)[2]
Total assets Increase ₩262.174 trillion (2016)[2]
Total equity Increase ₩172.876 trillion (2016)[2]
Number of employees
 308.745 (2016FY) (325.677-2015)
Parent Samsung Group
Divisions Samsung Telecommunications
Subsidiaries Samsung Medison (68.5%)[2]
Harman International Industries
Website samsung.com
Samsung Electronics quarterly results

Samsung Electronics Co., Ltd. (Korean: 삼성전자; Hanja: 三星電子 (Literally "tristar electronics")) is a South Korean multinational electronics company headquartered in Suwon, South Korea.[1] Through extremely complicated ownership structure with some circular ownership,[3] it is the flagship division of the Samsung Group, accounting for 70% of the group's revenue in 2012.[4] It is the world's second largest information technology company by revenue after Apple.[5] Samsung Electronics has assembly plants and sales networks in 80 countries and employs around 370,000 people.[6] Since 2012, Kwon Oh-hyun has served as the company's CEO.[7][8]

Samsung has long been a major manufacturer of electronic components such as lithium-ion batteries, semiconductors, chips, flash memory and hard drive devices for clients such as Apple, Sony, HTC and Nokia.[9][10]

It is the world's largest manufacturer of mobile phones and smartphones fueled by the popularity of its Samsung Galaxy line of devices.[11] The company is also a major vendor of tablet computers, particularly its Android-powered Samsung Galaxy Tab collection, and is generally regarded as pioneering the phablet market through the Samsung Galaxy Note family of devices.[12]

Samsung has been the world's largest television manufacturer since 2006,[13] and the world's largest manufacturer of mobile phones since 2011.[14] It is also the world's largest memory chips manufacturer.[15]

In July 2017, Samsung Electronics overtook Intel as the largest semiconductor chip (PC chip) maker in the world.[16] At the same period, Samsung Electronics' market cap rose to US$316 billion.[17]

History

1969–1987: Early years

Samsung Electric Industries was established as an industry Samsung Group in 1969 in Suwon, South Korea.[18] Its early products were electronic and electrical appliances including televisions, calculators, refrigerators, air conditioners and washing machines. In 1970, Samsung Group established another subsidiary, Samsung-NEC, jointly with Japan's NEC Corporation to manufacture home appliances and audiovisual devices. In 1974, the group expanded into the semiconductor business by acquiring Korea Semiconductor, one of the first chip-making facilities in the country at the time. The acquisition of Korea Telecommunications, an electronic switching system producer, was completed at the start of the next decade in 1980.

By 1981, Samsung Electric Industries had manufactured over 10 million black-and-white televisions. In February 1983, Samsung's founder, Lee Byung-chull, along with the board of the samsung industry and corporation agreement and help by sponsoring the event, made an announcement later dubbed the "Tokyo declaration", in which he declared that Samsung intended to become a DRAM (dynamic random-access memory) vendor. One year later, Samsung became the third company in the world to develop a 64 kb DRAM. In 1988, Samsung Electric Industries merged with Samsung Semiconductor & Communications to form Samsung Electronics, as before that, they had not been one company and had not been a leading corporation together, but they were not rivals, as they had been in talks for a time, until they finally merged.

1988–1995: Consumer struggles

Samsung Electronics launched its first mobile phone in 1988, in the South Korean market.[19] Sales were initially poor and by the early 1990s, Motorola held a market share of over 60 percent in the country's mobile phone market compared to just 10 percent for Samsung.[19] Samsung's mobile phone division also struggled with poor quality and inferior products until the mid-1990s and exit from the sector was a frequent topic of discussion within the company.[20]

1995–2008: Component manufacturing

Lee Kun-Hee decided that Samsung needed to change strategy. The company shelved the production of many under-selling product lines and instead pursued a process of designing and manufacturing components and investing in new technologies for other companies. In addition, Samsung outlined a 10-year plan to shrug off its image as a "budget brand" and to challenge Sony as the world's largest consumer electronics manufacturer. It was hoped in this way Samsung would gain an understanding of how products are made and give a technological lead sometime in the future. This patient vertical integration strategy of manufacturing components has borne fruit for Samsung in the late-2000s.[21]

As Samsung shifted away from consumer markets, the company devised a plan to sponsor major sporting events. One such sponsorship was for the 1998 Winter Olympics held in Nagano, Japan.[22]

As a chaebol, Samsung Group wielded wealth that allowed the company to invest and develop new technology rather than build products at a level which would not have a detrimental impact on Samsung's finances.[23]

Samsung had a number of technological breakthroughs, particularly in the field of memory which are commonplace in most electrical products today. This includes the world's first 64Mb DRAM in 1992, 256 Mb DRAM in 1994, 1Gb DRAM in 1996.[24] In 2004, Samsung developed the world's first 8Gb NAND Memory chip and a manufacturing deal was struck with Apple in 2005. A deal to supply Apple with memory chips was sealed in 2005 and, as of October 2013, Samsung remains a key supplier of Apple components, manufacturing the A7 processors that are inside the iPhone 5s model.[25][26]

2008 to present: Consumer products

The Samsung display at the 2008 Internationale Funkausstellung in Berlin

For four consecutive years, from 2000 to 2003, Samsung posted net earnings higher than five-percent; this was at a time when 16 out of the 30 top South Korean companies ceased operating in the wake of the unprecedented crisis.[27][28]

In 2005, Samsung Electronics surpassed its Japanese rival, Sony, for the first time to become the world's twentieth-largest and most popular consumer brand, as measured by Interbrand.[29]

In 2007, Samsung Electronics became the world's second-largest mobile-phone maker, overtaking Motorola for the first time.[30] In 2009, Samsung achieved total revenues of US$117.4 billion, overtaking Hewlett-Packard to become the world's largest technology company measured by sales.[31]

In 2009 and 2010, the US and EU fined the company, together with eight other memory chip makers, for its part in a price-fixing scheme that occurred between 1999 and 2002. Other companies fined included Infineon Technologies, Elpida Memory and Micron Technology.[32][33][34][35][36] In December 2010, the EU granted immunity to Samsung Electronics for acting as an informant during the investigation (LG Display, AU Optronics, Chimei InnoLux, Chunghwa Picture Tubes and HannStar Display were implicated as result of the company's intelligence).[37][38]

Despite its consistent expansion, Samsung, along with its chairman Lee Kun-hee, has developed a reputation for insecurity regarding its financial stability and the potential for future crises to arise. After returning from a temporary retirement period in March 2010, Kun-hee stated that "Samsung Electronics' future is not guaranteed because most of our flagship products will be obsolete in 10 years from now."[39]

The company has set an ambitious goal of reaching $400 billion in annual revenues within ten years. The company has 24 research-and-development centers around the world, and since the early 2000s and in the Vision 2020, Samsung has emphasized technical research and development. However, the large number of online complaints indicate that the company is weak at listening to customer feedback regarding the design of its technology and software.

In April 2011, Samsung Electronics sold its HDD commercial operations to Seagate Technology for approximately US$1.4 billion. The payment was composed of 45.2 million Seagate shares (9.6 percent of shares), worth US$687.5 million, and a cash sum for the remainder.[40]

In May 2013, Samsung announced that it had finally managed to test speed-enhanced fifth generation (5G) technology successfully.

In April 2013, Samsung Electronics' new entry into its Galaxy S series smartphone range, the Galaxy S4 was made available for retail. Released as the upgrade of the best-selling Galaxy S III, the S4 was sold in some international markets with the company's Exynos processor.[41]

In July 2013, Samsung Electronics forecasted weaker than expected profits for its April to June quarter. While analysts expected around 10.1 trillion won, Samsung Electronics estimated an operating profit of ₩9.5 trillion (US$8.3 billion).[42] During the same month, Samsung acquired the media streaming device manufacturer Boxee for a reported $30 million.[43]

Samsung's mobile business chief Shin Jong-kyun stated to the Korea Times on 11 September 2013 that Samsung Electronics will further develop its presence in China to strengthen its market position in relation to Apple. The Samsung executive also confirmed that a 64-bit smartphone handset will be released to match the ARM-based A7 processor of Apple's iPhone 5s model that was released in September 2013.[44]

Due to smartphone sales—especially sales of lower-priced handsets in markets such as India and China—Samsung achieved record earnings in the third quarter of 2013. The operating profit for this period rose to about 10.1 trillion won (US$9.4 billion), a figure that was boosted by memory chip sales to customers such as Apple, Inc.[26] On 14 October 2013, Samsung Electronics publicly apologized for using refurbished components from cheaper desktop computers to fix higher-end products, after the corporation's unethical business practices were exposed on the previous day by MBC TV's current affairs magazine, 2580.[45]

Samsung provided sponsorship for the 86th Academy Awards ceremony (held 2 March 2014) and, due to the use of the Samsung Galaxy Note smartphone product by host Ellen DeGeneres in a group selfie photograph that became an online viral phenomenon, the corporation donated US$3 million to two charitable organizations selected by DeGeneres. The official Samsung statement explained: "... we wanted to make a donation to Ellen's charities of choice: St Jude's and the Humane Society. Samsung will donate 1.5 million dollars to each charity."[46][47]

On 17 April 2014, Samsung had announced it was discontinuing its ebook store effective 1 July 2014 and had partnered with Amazon to introduce the Kindle for Samsung app, that will permit Galaxy device users using Android 4.0 and up to buy and read content from Amazon's catalog of periodicals and ebooks, and a free book service, Samsung Book Deals, that will allow users of the co-branded app to choose one free ebook monthly from a selection provided by Amazon.[48]

In February 2014, Barnes & Noble announced a new Nook color tablet would be released in 2014.[49] In June 2014, Barnes & Noble announced it would be teaming up with Samsung – one of the leaders in Android-based tablets – to develop co-branded color tablets titled the Samsung Galaxy Tab 4 Nook; the devices will feature Samsung's hardware, including a 7-inch display, and customized Nook software from Barnes & Noble. The first Galaxy Tab 4 Nook will begin selling in the US in August 2014,[50] with Nook focusing on the software and content, and Samsung focusing on the hardware.[51][52] The product specs posted by Samsung indicate that, in contrast to the premium quality enhanced ereaders launched in 2012 (the NOOK HD and HD+, which "had screens and CPUs comparable to the best mid-level and premium tablets), the more budget-like features of the Samsung Galaxy Tab 4 Nook will be designed for a lower market tier (Android 4.4.2 KitKat on a 1.2 GHz quad-core Snapdragon CPU with 1.5GB RAM, Wifi, and Bluetooth, in addition to a 1.2MP front-facing camera and a 3MP rear camera, screen resolution of 1280 x 800, and a $199 retail price; roughly $80 more than comparable tablets that don't carry a Samsung brand).[53]

In reporting on Barnes & Noble's 5 June 2014 announcement that the bookseller would be teaming up with Samsung to develop Nook tablets, the Associated Press noted:[51]

"Barnes & Noble says it will continue to make and sell its $99 Nook Glowlight[sic] e-readers and provide customer support."
"The company also says it is moving its Nook employees out of its Palo Alto, Calif., offices to save money. Employees are expected to move to a smaller space in nearby Santa Clara, Calif., by July."

In Q1 2015, Samsung's profit dropped 39% to USD4.35 billion due to heavier smartphone competition from Apple's iPhone 6 and 6 Plus, as well as a slew of Android competitors.[54]

In May 2015, Samsung announced a partnership with IKEA, in accordance with the Wireless Power Consortium, to co-develop furniture that would allow Qi inductive charging at the Mobile World Congress.[55] In June, Samsung established a dedicated LFD business, Samsung display solutions,[56] catering to the company's SMART range of LED products. The company's SMART range of LED displays include Signage, Hospitality Display, TV, LED, Cloud Display, and Accessories. The company provides the following all-in-one customer software solutions: MagicInfo, MagicIWB, LYNK SINC, LYNK HMS, and LYNK REACH. The company caters to the following industries: Retail, Corporate, Corporate, Hospitality, and Transportation.

On 16 June 2016, Samsung Electronics announced that it has agreed to acquire cloud-computing company Joyent. It will allow it to grow its cloud-based services for its smartphones and Internet-connected devices.[57]

On 14 November 2016, Samsung Electronics announced an agreement to buy American automotive equipment manufacturer Harman for US$8 billion.[58] On 10 March 2017, the acquisition was completed.[59] On 6 April 2017, Samsung Electronics reported that financials were up for the company in the quarter. The year prior, "memory chips and flexible displays accounted for about 68 per cent of Samsung's operating profit in the final quarter of 2016, a change from previous years when the smartphone business was the main contributor."[60]

On 2 May 2017, Samsung has been given permission from The Ministry of Land, Infrastructure and Transport of Korea to start testing a self-driving car technology.[61][62] According to the Korea Herald, the company will be using a customized Hyundai car for the tests.[63]

Samsung Electronics logo, used from late 1969 until replaced in 1979 
Samsung Electronics logo, used from late 1980 until replaced in 1992 
Samsung Electronics logo, used from late 1993 until replaced in 2015[64] 
Samsung's wordmark and current logo of Samsung Electronics, in use since 2014 

Operations

Samsung Electronics Profit by segment
CE: Consumer Electronics
DS: Device Solutions
IM: IT & Mobile communications
A Samsung store in Taguig, Philippines.

The company focuses on four areas: digital media, semiconductor, telecommunication network and LCD digital appliances.[65]

The digital-media business area covers computer devices such as laptop computers and laser printers; digital displays such as televisions and computer monitors; and consumer entertainment devices such as DVD players, MP3 players and digital camcorders; and home appliances such as refrigerators, air conditioners, air purifiers, washers, microwave ovens, and vacuum cleaners.

The semiconductor-business area includes semiconductor chips such as SDRAM, SRAM, NAND flash memory; smart cards; mobile application processors; mobile TV receivers; RF transceivers; CMOS Image sensors, Smart Card IC, MP3 IC, DVD/Blu-ray Disc/HD DVD Player SOC and multi-chip package (MCP); and storage devices such as optical disc drives and formerly hard disk drives.

The telecommunication-network-business area includes multi-service DSLAMs and fax machines; cellular devices such as mobile phones, PDA phones, and hybrid devices called mobile intelligent terminals (MITs); and satellite receivers.

The LCD business area focuses on producing TFT-LCD and organic light-emitting diode (OLED) panels for laptops, desktop monitors, and televisions.

Samsung Print was established in 2009 as a separate entity to focus on B2B sales and has released a broad range of multifunctional devices and printers and more.[66]

Products

LCD and LED panels

The Samsung Galaxy S II, which incorporates a Super AMOLED Plus screen

By 2004 Samsung was the world's-largest manufacturer of OLEDs, with a 40 percent market share worldwide,[67] and as of 2010 has a 98% share of the global AMOLED market.[68] The company generated $100.2 million out of the total $475 million revenues in the global OLED market in 2006.[69] As of 2006, it held more than 600 American patents and more than 2,800 international patents, making it the largest owner of AMOLED technology patents.[69]

Samsung's current AMOLED smartphones use its Super AMOLED trademark, with the Samsung Wave S8500 and Samsung i9000 Galaxy S being launched in June 2010. In January 2011, it announced its Super AMOLED Plus displays[70] – which offer several advances over the older Super AMOLED displays – real stripe matrix (50 percent more sub pixels), thinner form factor, brighter image and an 18 percent reduction in energy consumption.

In October 2007, Samsung introducing a ten-millimeter thick, 40-inch LCD television panel, followed in October 2008 by the world's first 7.9-mm panel.[71] Samsung developed panels for 24-inch LCD monitors (3.5 mm) and 12.1-inch laptops (1.64 mm).[72] In 2009, Samsung succeeded in developing a panel for forty-inch LED televisions, with a thickness of 3.9 millimeters (0.15 inch). Dubbed the "Needle Slim", the panel is as thick (or thin) as two coins put together. This is about a twelfth of the conventional LCD panel whose thickness is approximately 50 millimeters (1.97 inches).

While reducing the thickness substantially, the company maintained the performance of previous models, including Full HD 1080p resolution, 120 Hz refresh rate, and 5000:1 contrast ratio.[73] On 6 September 2013, Samsung launched its 55-inch curved OLED TV (model KE55S9C) in the United Kingdom with John Lewis.[74]

In October 2013, Samsung disseminated a press release for its curved display technology with the Galaxy Round smartphone model. The press release described the product as the "world's first commercialized full HD Super AMOLED flexible display." The manufacturer explains that users can check information such as time and battery life when the home screen is off, and can receive information from the screen by tilting the device.[75]

Mobile phones

Samsung Galaxy smartphones

Samsung's flagship mobile handset line is the Samsung Galaxy S, which many consider a direct competitor of the Apple iPhone.[76] It was initially launched in Singapore, Malaysia and South Korea in June 2010,[77][78][79] followed by the United States in July. It sold more than one million units within the first 45 days on sale in the United States.[80]

While many other handset makers focused on one or two operating systems, Samsung for a time used several of them: Symbian, Windows Phone, Linux-based LiMo, and Samsung's proprietary Bada.[81]

By 2013 Samsung had dropped all operating systems except Android and Windows Phone. That year Samsung released at least 43 Android phones or tablets and two Windows Phones.[82]

At the end of the third quarter of 2010, the company had surpassed the 70 million unit mark in shipped phones, giving it a global market share of 22 percent, trailing Nokia by 12 percent.[83][84] Overall, the company sold 280 million mobile phones in 2010, corresponding to a market share of 20.2 percent.[85] The company overtook Apple in worldwide smartphone sales during the third quarter 2011, with a total market share of 23.8 percent, compared to Apple's 14.6 percent share.[86] Samsung became the world's largest cellphone maker in 2012, with the sales of 95 million smart phones in the first quarter.[87]

During the third quarter of 2013, Samsung's smartphone sales improved in emerging markets such as India and the Middle East, where cheaper handsets were popular. As of October 2013, the company offers 40 smartphone models on its US website.[26]

Semiconductors

A Samsung DDR-SDRAM

Samsung Electronics has been the world's largest memory chip maker since 1993. In 2009, it started mass-producing 30 nm-class NAND flash memories.[88] It succeeded in 2010 in mass-producing 30 nm-class DRAMs and 20 nm-class NAND flashes, both of which were the first time in the world.[89]

According to market-research firm Gartner, during the second quarter of 2010 Samsung Electronics took the top position in the DRAM segment due to brisk sales of the item on the world market. Gartner analysts said in their report, "Samsung cemented its leading position by taking a 35-percent market share. All the other suppliers had minimal change in their shares." The company took the top slot in the ranking, followed by Hynix, Elpida, and Micron, said Gartner.[90]

Another area where the company had significant business in for years is the foundry segment. It had begun investment in the foundry business since 2006 and now positioned it as one of the strategic pillars for semiconductor growth.[91]

In 2010, market researcher IC Insights predicted that Samsung would become the world's-biggest semiconductor chip supplier by 2014, surpassing Intel. For the ten-year period from 1999 to 2009, Samsung's compound annual growth rate in semiconductor revenues has been 13.5 percent, compared with 3.4 percent for Intel.[92][93]

For 2015, IC Insights and Gartner announced that Samsung was the fourth largest chip manufacturer in the world.[94]

Televisions

Samsung UN105S9 105-inch ultra high definition 4K television.

In 2009, Samsung sold around 31 million flat-panel televisions, enabling to it to maintain the world's largest market share for a fourth consecutive year.[95]

Samsung launched its first full HD 3D LED television in March 2010.[96] Samsung had showcased the product at the 2010 International Consumer Electronics Show (CES 2010) held in Las Vegas.[97]

Samsung sold more than one million 3D televisions within six months of its launch. This is the figure close to what many market researchers forecast for the year's worldwide 3D television sales (1.23 million units).[98] It also debuted the 3D Home Theater (HT-C6950W) that allows the user to enjoy 3D image and surround sound at the same time. With the launch of 3D Home Theater, Samsung became the first company in the industry to have the full line of 3D offerings, including 3D television, 3D Blu-ray player, 3D content, and 3D glasses.[99]

In 2007, Samsung introduced the Internet TV, enabling the viewer to receive information from the Internet while at the same time watching conventional television programming. Samsung later developed "Smart LED TV" (now renamed to "Samsung Smart TV"),[100] which additionally supports downloaded apps. In 2008, the company launched the Power Infolink service, followed in 2009 by a whole new Internet@TV. In 2010, it started marketing the 3D television while unveiling the upgraded Internet@TV 2010, which offers free (or for-fee) download of applications from its Samsung Apps App Store, in addition to existing services such as news, weather, stock market, YouTube videos, and movies.[101]

Samsung Apps offers for-fee premium services in a few countries including Korea and the United States. The services will be custom-tailored for each region. Samsung plans to offer family-oriented applications such as health care programs and digital picture frames as well as games. Samsung's range of smart TVs include the apps ITV Player and motion controlled Angry Birds.

Digital cinema

On July 13, 2017, an LED screen for digital cinema developed by Samsung Electronics was publicly demonstrated on one screen at Lotte Cinema World Tower in Seoul.[102]

Other

The Samsung GX-10 digital SLR camera

Samsung produces printers for both consumers and business use, including mono-laser printers, color laser printers, multifunction printers, and enterprise-use high-speed digital multi-function printer models.

In 2010, the company introduced some more energy efficient products, including the laptop R580, netbook N210, the world's-smallest mono-laser printer ML-1660, and color laser multifunction printer CLX-3185.

Samsung has introduced several models of digital cameras and camcorders including the WB550 camera, the ST550 dual-LCD-mounted camera, and the HMX-H106 (64GB SSD-mounted full HD camcorder). In 2009, the company took the third place in the compact camera segment. Since then, the company has focused more on higher-priced items. In 2010, the company launched the NX10, the next-generation interchangeable lens camera.

In the area of storage media, in 2009 Samsung achieved a ten percent world market share, driven by the introduction of a new hard disk drive capable of storing 250Gb per 2.5-inch disk.[103] In 2010, the company started marketing the 320Gb-per-disk HDD, the largest in the industry. In addition, it was focusing more on selling external hard disk drives. Following financial losses, the hard disk division was sold to Seagate in 2011.

In the MP3 player segment, Samsung has launched products including the M1 MP3 player, and the world's-smallest DivX MP3 player R1.[104]

In 2014, the company announced that it was exiting the laptop market in Europe.[105]

In 2015, Samsung announced a proposal for a constellation of 4600 satellites orbiting Earth at 1,400 kilometers (900 mi) altitude that could bring 200 gigabytes per month of internet data to "each of the world's 5 billion people".[106][107] The proposal has not yet advanced to full development. If built, such a constellation would compete with previously-announced satellite constellations currently under development by OneWeb and SpaceX.[106]

Management and board of directors

In December 2010, Samsung switched its management system from a single CEO-system under Choi Gee-Sung to a two-person management team with Choi Gee-Sung, CEO and vice chairman, and Lee Jae-Yong, chief operating officer and president. In June 2012, Samsung appointed Kwon Oh-hyun as the new CEO of the company.[108] The team was credited as being younger both in age and outlook, and some executives dyed their hair black.[109] Samsung also reorganized its overseas marketing bases in line with changes in the market, including a combined Britain/Continental Europe regional subsidiary, and a combined China/Taiwan regional subsidiary.

In 2012, Samsung appointed director of mobile products, JK Shin, to president/CEO of Samsung Electronics for Mobile Consumer Products.

The company added a new digital imaging business division in 2010, and now consists of eight divisions, including the existing display, IT solutions, consumer electronics, wireless, networking, semiconductor, and LCD divisions.

It also reorganized its business organization to strengthen business synergies, by merging its Digital Air Solutions Team and Samsung Electronics Gwangju (consumer electronics and air conditioners, merged in 2010) under the consumer electronics business division. The set-top boxes business was merged with the Visual Display Business division.

The company's December 2010 reorganization was as follows: Among the eight divisions, the network division and the digital imaging division experienced new appointments, while the remaining divisions were maintained in accordance with their results.

The following are the names of board of directors members:[110]

Gee-Sung Choi Vice chairman, President and chief executive officer
Ju-Hwa Yoon Chief financial officer
Dong-Min Yoon Independent director (Attorney at Law, Kim & Chang)
Chae-Woong Lee Independent director (Professor of Economics, Sungkyunkwan University)
In-Ho Lee Independent director (Advisor, Shinhan Bank)
Oh-Soo Park Independent director (Professor of Business Administration, Seoul National University)

Market share

Product Samsung
world market share 		Leading competitor Market share Year Source
DRAM 49.6% SK Hynix 24.8% Q2 2013 [111]
NAND flash 41.6% Toshiba 28.7% Q2 2011 [112]
Large-size LCD panels
(revenue) 		20.2% LG Display 26.7% Q4 2013 [113]
Active-matrix OLEDs 98% LG Display, AUO 0.5~1.5% Q2 2010 [114]
Lithium-ion batteries 18% Sanyo 20% Q2 2010 [115]
LCD monitors 18% LG Electronics 12.7% 2010 [116]
Hard-disk drives 9% Western Digital 31.3% Q1 2010 [117]
Televisions
(LCD, PDP, CRT, LED) 		24% LG Electronics 14.7% Q2 2010 [118]
Mobile phones 34% Apple Inc. 13.4% Q3 2013 [119]
Digital cameras 11.8% Sony 17.4% 2010 [120]
Application processors 5.4% Qualcomm 33.9% Q3 2013 [121]

Major clients

Samsung's largest clients (Q1 2010)[122]
Rank/company Part description Percent of total sales
1 Sony DRAM, NAND flash, LCD panels, etc. 3.7
2 Apple Inc. AP (mobile processor), DRAM, NAND flash, etc. 2.6
3 Dell DRAM, flat-panels, lithium-ion batteries, etc. 2.5
4 Hewlett-Packard DRAM, flat-panels, lithium-ion batteries, etc. 2.2
5 Verizon Communications Handsets, etc. 1.3
6 AT&T Inc. Handsets, etc. 1.3

Relationship with Apple Inc.

Despite recent litigation activity, Samsung and Apple have been described as frenemies who share a love-hate relationship.[123] Samsung is a major supplier for Apple – first providing memory for the early iPod devices in 2005,[25] and Apple is a key customer for Samsung – in 2012 its component sales were thought to be worth in the region of $8 billion revenue to Samsung[123] – to the point where Apple CEO Tim Cook originally opposed litigation against Samsung wary of the company's critical component supply chain for Apple.[124]

In April 2011, Apple Inc. announced that it was suing Samsung over the design of its Galaxy range of mobile phones. The lawsuit was filed on 15 April 2011 and alleges that Samsung infringed on Apple's trademarks and patents of the iPhone and iPad.[125] Samsung issued a counterclaim against Apple of patent infringement.[126] In August 2011, at The Regional Court of Düsseldorf, Apple was granted a preliminary injunction against the sale and marketing of the Samsung Galaxy Tab 10.1 across the whole of Europe excluding the Netherlands.[127] The ban has been temporarily lifted in the European Union, with the exclusion of Germany, whilst it is investigated whether or not the original injunction was appropriate.[128]

On 31 August 2012, the Tokyo District Court ruled Samsung Electronics' mobile devices did not violate an Apple patent.[129] The case only addressed Apple's patent that allows mobile devices and personal computers to synchronize or share data with each other and is not comparable with the U.S. court case ruled on 24 August. On 18 October 2012, U.K. High Court ruled that Samsung did not infringe Apple's design patents. Apple was forced to issue a court-ordered apology to Samsung on its official U.K. website.[130]

Relationship with Best Buy Co., Inc.

Best Buy and Samsung joined together to create the Samsung Experience Shop, a store-in-a-store which allows customers to test the company's newest products, as well as get training in mobile products they already own. In summer 2013, more than 1,400 Best Buy and Best Buy Mobile stores have established the Samsung Experience Shop. About 460 square feet of space are dedicated for the SES, with the company's placement at Best Buy's entrance, as well as its sign visible in any part of the store.[131] The purpose of the Samsung Experience Shop is to make Samsung's products, i.e. the Galaxy, more accessible to customers.

The SES is a place for customers who already purchased Samsung devices, as well as potential customers. Samsung claims to employ experts that could tackle any issue that customers are experiencing, either about the device or the service. These experts could help with "advice, product selection, tips and trick."[132]

Samsung and Best Buy have been long time partners. The one difference the experience store adds to the relationship is that "Samsung products are going to be located in a single central area instead of being scattered around the store" said Chen, a New York Times reporter. In the experience store, Samsung employees would handle their products and Best Buy employees would handle the rest.

Samsung Electronics Canada first experimented with the idea of a standalone retail center with its Olympic Rendezvous @ Samsung stores in Vancouver, BC, Canada that operated during the 2010 Winter Olympics. The electronics company went on to open its first official standalone retail store in Burnaby, BC in July 2012.[133] The conceptualization of an individual, specialized retail location for Samsung has been largely influenced by the success of these two projects.

The first Samsung Experience Shops began rolling out across Best Buy locations in the United States in May 2013. In May 2014, Best Buy announced its plans to add 500 new Samsung Entertainment Experience Shops. While the previous Samsung Experience locations focus primarily on showcasing and providing support for Samsung's Galaxy smartphones, cameras, and tablets, these new locations will showcase and support the company's home theater products.

Unlike the Samsung Experience Shop, the Samsung Entertainment Experience will be run by Samsung trained Best Buy associates. The new centers are expected to finish rolling out across Best Buys in the US by January 2015.[134]

Design

In the early 1990s, the firm began considering the importance of physical design in its products. Located in the company's high-rise headquarters in Gangnam (south of Seoul) the corporate design center includes more than 900 full-time designers. In 1971 there were only two designers[135] in the whole company, whose number rose to 510 in 2005.

The company overhauls its design over a two-year cycle. For the first year, it scrutinizes design trends of the world, followed by product strategies. It then maps out new design plans during the second year.

Since 2006, it has won as many as 210 awards from international design institutions. It received the iF (International Forum) and IDEA design awards. Samsung was the winner in eight categories in the 2009 IDEA awards, the company that received the most awards.[136]

In the 2010 iF Material Awards, the company won the Gold Award for five of its products including the external hard disk drive. The iF Material Awards are given by the International Forum Design GmbH of Hannover, a design award for design materials and process technologies. In 2010, the German company selected a total of 42 products in the areas of home appliance, furniture, and industrial design. Samsung won the awards in five categories including external hard disk, full-touch screen phone, "side-by-side" refrigerator, compact digital camera, and laser printer toner.[137]

Environmental record

All Samsung mobile phones and MP3 players introduced on the market after April 2010 are free from polyvinyl chloride (PVC) and brominated flame retardants (BFRs).[138]

The company is listed in Greenpeace's Guide to Greener Electronics, which rates electronics companies on policies and practices to reduce their impact on the climate, produce greener products, and make their operations more sustainable. In November 2011 Samsung was ranked 7th out of 15 leading electronics makers with a score of 4.1/10.[139] In the newly re-launched guide Samsung moved down two places (occupying 5th position in October 2010) but scored maximum points for providing verified data and its greenhouse gas emissions and also scored well for its Sustainable Operations with the guide praising its relatively good e-waste take-back programme and information. However, the company was criticized for not setting an ambitious target to increase its use of renewable energy and for belonging to a trade association which has commented against energy efficiency standards.[139]

In June 2004, Samsung was one of the first major electronics companies to publicly commit to eliminate PVC and BFRs from new models of all their products. The company however failed to meet its deadlines to be PVC- and BFRs-free, and has published new phase out dates.[140] Greenpeace activists protested at the company's Benelux headquarters in March 2010 for what Greenpeace calls Samsung's broken promises.[141]

The company has been awarded as one of global top-ten companies in the Carbon Disclosure Leadership Index (CDLI). It was the only Asian company among top ten companies. In addition, the company is listed in Dow Jones Sustainability Index (DJSI).[142]

The company's achievement ratio of products approaching the Global Ecolabel level ("Good Eco-Products" within the company) is 11 percentage points above the 2010 goal (80 percent). As of the first half of 2010, Samsung earned the Global Ecolabel for its 2,134 models, thereby becoming the world's number-one company in terms of the number of products meeting Global Ecolabel standards.[142]

The company is also improving its effort to recover and recycle electronic wastes.[143] The amount of wastes salvaged throughout 60 countries during 2009 was as much as 240,000 tons. The "Samsung Recycling Direct" program, the company's voluntary recycling program under way in the United States, was expanded to Canada.[144]

In 2008, the company was praised for its recycling effort by the U.S. advocacy group Electronics Take Back Coalition as the "best eco-friendly recycling program".[145]

Litigation and safety issues

Worker safety

In Samsung's Gi-Heung and On-Yang semiconductor plants, at least 26 employees were diagnosed with blood cancer, a total 193 person got sick with cancers or rare terminal diseases.[146][147] Initially Samsung denied being responsible for the illnesses. Although Samsung is known to disfavor trade unions,[148] these sick workers organized in the group SHARPS (Supporters for the Health And Rights of People in the Semiconductor Industry).[149] A crowd funded movie named Another Promise was produced in 2013 in order to depict the fight for compensation of the victims, as well as a documentary named The Empire of Shame. In May 2014, Samsung offered an apology and compensation to workers who became ill.[150][151] The company subsequently did not follow all the recommendations of a specially appointed mediation committee, paid several families outside of a scheme to be agreed on and required them to drop all further charges, prompting SHARPS to continue legal and public action.[152] The quarrel is still ongoing, as the number of sick and dead employees is still rising.

DRAM price fixing

In December 2010, the European Commission fined six LCD panel producers, including Samsung, a total of €648,925 million for operating as a cartel. The company received a full reduction of the potential fine for being the first firm to assist EU anti-trust authorities.[153]

On 19 October 2011, Samsung was fined €145,727 million for being part of a price cartel of ten companies for DRAMs which lasted from 1 July 1998 to 15 June 2002. The company received, like most of the other members of the cartel, a 10% reduction for acknowledging the facts to investigators. Samsung had to pay 90% of their share of the settlement, but Micron avoided payment as a result of having initially revealed the case to investigators.[154]

In Canada, the price fix was investigated in 2002. A recession started to occur that year, and the price fix ended, however in 2014, the Canadian government reopened the case and investigated silently after the EU's success. Sufficient evidence was found and presented to Samsung and two other manufacturers during a class action lawsuit hearing. The companies agreed upon a $120 million agreement, with $40 million as a fine, and $80 million to be paid back to Canadians who purchased a computer, printer, MP3 player, gaming console or camera from April 1999 to June 2002.[155]

Apple lawsuit

Apple sued Samsung on 15 April 2011 in the United States District Court for the Northern District of California that several of Samsung's Android phones and tablets, including the Nexus S, Epic 4G, Galaxy S 4G, and the Samsung Galaxy Tab, infringed on Apple's intellectual property: its patents, trademarks, user interface and style.[156] Apple's complaint included specific federal claims for patent infringement, false designation of origin, unfair competition, and trademark infringement, as well as state-level claims for unfair competition, common law trademark infringement, and unjust enrichment.[157][158]

On 24 August 2012 the jury returned a verdict largely favorable to Apple. It found that Samsung had willfully infringed on Apple's design and utility patents and had also diluted Apple's trade dresses related to the iPhone. The jury awarded Apple $1.049 billion in damages and Samsung zero damages in its counter suit.[159] The jury found Samsung infringed Apple's patents on iPhone's "Bounce-Back Effect" (US Patent No.7,469,381), "On-screen Navigation (US Patent No.7,844,915), and "Tap To Zoom" (US Patent No.7,864,163), and design patents that covers iPhone's features such as the "home button, rounded corners and tapered edges" (US D593087) and "On-Screen Icons" (US D604305).[160]

Product safety

Despite their phones' popularity, numerous explosions of them have been reported.[161] A Swiss teenager was left with second and third degree burns in her thigh due to her Galaxy S3's explosion[162] followed by two more Galaxy S3 explosions in Switzerland[163] and Ireland.[164] A South Korean student's Galaxy S2 battery exploded in 2012.[165]

Samsung's Galaxy S4 also led to several accidents. A house in Hong Kong was allegedly set on fire by an S4 in July 2013,[166] followed by minor S4 burn incidents in Pakistan[167] and Russia.[168] A minor fire was also reported in Newbury, United Kingdom in October 2013.[169]

Some users of the phone have also reported swelling batteries and overheating;[170] Samsung has offered customers affected new batteries free of charge.[171] In December 2013, a Canadian uploaded a YouTube video describing his S4 combusting.[172] Samsung then asked the uploader to sign a legal document requiring him to remove the video, remain silent about the agreement, and surrender any future claims against the company in order to receive a replacement. No further response from Samsung was received afterwards.[173][174] There were a few more reported Galaxy S4 explosions in India[175] and the UAE.[176]

Galaxy Note 7

On 31 August 2016, it was reported that Samsung was delaying shipments of the Galaxy Note 7 in some regions in order to perform "additional tests being conducted for product quality"; this came alongside user reports of batteries exploding while charging. On 2 September 2016 Samsung suspended sales of the Note 7 and announced a worldwide "product exchange program",[177] in which customers will be able to exchange their Note 7 for another Note 7, a Galaxy S7, or an S7 Edge (the price difference being refunded). They would also receive a gift card from a participating carrier.[177] On 1 September 2016, the company released a statement saying that it had received 35 reports of battery failure, which according to an unnamed Samsung official "account for less than 0.1 percent of the entire volume sold".[178][179][180] Although it has been referred to as a product recall by the media, it was not an official government-issued recall by an organization such as the U.S. Consumer Product Safety Commission (CPSC), and only a voluntary measure.[177][181] The CPSC did issue an official recall notice on 15 September 2016, and states that Samsung has received at least 92 reports of the batteries overheating in the U.S., including 26 reports of burns and 55 reports of property damage.[182]

After some replacement Note 7 phones also caught fire,[183][184] on 11 October 2016 Samsung announced that it would permanently end production of the Note 7 in the interest of customer safety.[185][186] However, Samsung was hoping to recover from the lost sales from the Note 7 with the introduction of the Edge 7.[187]

On 14 October 2016, the U.S. Federal Aviation Administration and the Department of Transportation's Pipeline and Hazardous Materials Safety Administration banned the Note 7 from being taken aboard any airline flight, even if powered off.[188][189] Following the FAA ban on aircraft carriage Qantas, Virgin Australia and Singapore Airlines also banned the carriage of Note 7s on their aircraft with effect from midnight on 15 October.[190] In Mexico the largest airlines Aeromexico, Interjet, Volaris and VivaAerobus have all banned the handset.[191]

Washing machines

On 4 November 2016, Samsung recalled 2.8 million top-load washing machines sold at home appliance stores from 2011 to 2016 because the machine's top could unexpectedly detach from the chassis during use that could be caused by excessive vibration.[192]

Advertisements on smart televisions

In 2015, users on the website Reddit began reporting that some Samsung smart TV would display advertisements for Pepsi products during movies when viewed through the Plex application.[193] Plex denied responsibility for the ads and Samsung told blog Gigaom that they were investigating the matter.[193]

In March 2016, soccer star Pelé filed a lawsuit against Samsung in the United States District Court for the Northern District of Illinois seeking $30 million in damages claiming violations under the Lanham Act for false endorsement and a state law claim for violation of his right of publicity.[194] The suit alleges, that at one point Samsung and Pelé came close to entering into a licensing agreement for Pelé to appear in a Samsung advertising campaign. Samsung abruptly pulled out of the negotiations. The October 2015 Samsung ad in question, includes a partial face shot of a man who allegedly "very closely resembles" Pelé and also a superimposed ultra-high-definition television screen next to the image of the man featuring a "modified bicycle or scissors-kick", perfected and famously used by Pelé.[195]

In December 2016, Samsung forced updated their smart TV line to being displaying advertisements in their menus.[196]

Viral marketing

On 1 April 2013, several documents were shown on TaiwanSamsungLeaks.org that the advertising company OpenTide (Taiwan) and its parent company Samsung are hiring students to attack its competitors by spreading harmful words and biased opinions/reviews about other phone manufacturers' products such as Sony and HTC in several famous forums and websites in Taiwan in order to improve its brand image. The uploader of the documents, hacker "0xb" said that the documents were intercepted from an email between OpenTide and Samsung.[197] Taiwan Samsung Electronics announced 4 days later, guaranteeing the company will "stop all online marketing strategies which involves publishing and replying in online forums."[198] It was widely reported by the Taiwanese media.[199][200][201][202] Taiwan later fined Samsung Electronics for the smear campaign.[203]

Sports clubs

Slogans

See also

References

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