Samsung's mobile chief gets shunted aside for software guy

Opportunity Knox – but don't worry, he's still co-CEO

Samsung Electronics has replaced the head of its mobile business, who has been in post for the past six years.

Shin Jong-Kyun will be retained as a "co-chief executive" of the giant, which spans semiconductors and displays, white goods such as fridges, cookers and vacuum cleaners, home electronics such as TVs, and smartphones and tablets.

It was the latter, overseen by Shin, that contributed most to Samsung's growth in recent years. Shin oversaw the success of the Galaxy brand.

Samsung Electronics is still profitable, and revenue in its mobile division actually increased this year. However profits have fallen for five straight quarters, and revenue growth is now largely driven by memory and displays, not phones.

Samsung outspends anyone else in the industry on marketing, with an estimated $14bn on marketing and promotion in 2013, to promote a high margin model. But this is being undercut by increasingly high quality goods from Huawei and Xiaomi, which can live with lower margins, and much lower costs.

In addition, consumers in mature markets are looking for value and moving to SIM-only deals. Two-thirds of post-pay mobile contracts in the UK will soon be under £20 a month, CCS Insight reckons. And in such a saturated, competitive market, "good enough" seals the deal.

Koh Dong-jin, Samsung's head of mobile research and development, assumes Shin's job. Koh helped develop Samsung Pay and Knox. Shin remains president and co-CEO.®

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