Sales of Samsung Electronics? LCD unit during the first quarter of this year declined 5 percent from the same period last year to 6.5 trillion won ($6 billion), while the operating deficit stood at 230 billion won.
Analysts forecast liquid crystal displays were unlikely to look up any time soon in the face of surging demand and supplies of smart devices such as smartphones and tablets.
Samsung, last week, merged Samsung?s Electronics? embattled liquid crystal display unit into a newly created Digital Solutions division to be headed by Kwon Oh-hyun, chief executive of the company?s semiconductor business.
Chang Won-kie, chief executive of the LCD unit, was removed from his post to become adviser to Kwon in a move that industry watchers saw to be a demotion criticizing Chang?s role for the LCD unit?s lackluster performance.
The newly created Digital Solutions team was the result of merging together the company?s memory chip, system LSI and LCD unit.
The LCD unit?s slumping performance was seen to be main reason behind the rare July reshuffle.
?I?ve heard that the LCD business is in the doldrums, but we cannot give up in the face of adversity,? Kwon told reporters on Friday, promising new measures to help rejuvenate the display business.
?The sluggish performance of the (components) division had an impact on the latest reshuffling, but we hope for the changes to help normalize LCD and other parts business divisions,? said Rhee In-yong, executive vice president of Samsung communications? team.
Rhee also said another objective behind the reshuffling was to show its clients that Samsung was moving to establish firewalls between its units.
Samsung?s newly-launched upgraded Galaxy S II is selling well in its strategic key markets and analysts say Apple?s decision to delay the launch of the next iPhone, the iPhone 5, will also help the company.
“We don?t think Samsung?s display business will fall further in the coming quarters, although the outlook for the chip market is still uncertain on slower global economic recovery,” said Kim Jang-yeol, an analyst at Mirae Asset Securities.
Samsung expects its smartphone shipments this year will reach 60 million, with sales to exceed 20 million in the second quarter after sales of around 14 million in the first quarter.
Samsung, the world’s biggest maker of memory chips and LCDs by sales, is the first major global technology firm to give earnings guidance for the second quarter. The company’s weak estimates reflect faltering demand for consumer electronics amid a slowing global economic recovery.
Earlier this year, Young Woo Jun, Mobile Phone Sales and Marketing Director of Samsung Gulf Electronics, commented on their performance, “We accomplished our fourth quarter goals in theMiddle Eastdue to the rising demand of smartphones in emerging markets. Due to our diverse product mix of mass-market smartphones and touch-screen feature phones, we were able to register a solid sales growth for 2010.”
“For 2010, we had launched our comprehensive portfolio of smartphones such as the Galaxy S, Galaxy Tab, Wave and its series to meet the increasing demand of smartphones and replacement demand for full-touch screen phones,” Jun continued. We can expect a strong market growth for the mobile division as we plan on more than double the smartphone shipments in 2011.
Looking at strong growth figures, and the increasing demand for smartphones and tablets in the Middle East, Samsung is poised to make strides in its sales.
Sources: Korea Times, koreaherald, WSJ, GulfNews