Samsung Electronics' Device Experience (DX) division is seeking ways to overcome poor performance in its non-semiconductor businesses. While focusing on strengthening its mobile sector, the company is also beginning to streamline underperforming areas like home appliances.
On May 7, industry sources reported that Samsung has decided to halt sales of TVs, monitors, washing machines, vacuum cleaners, and refrigerators in China. The company officially notified employees at a meeting the previous afternoon and has informed local distribution channels and partners of this decision. Alongside the sales halt, adjustments to local staffing and organizational restructuring are expected.
Changes are also occurring within the domestic TV business. Lee Won-jin, the head of global marketing, has been appointed as the new head of the Video Display (VD) division. Lee is known for successfully launching platform businesses like Samsung TV Plus, an ad-supported streaming service. The strategy aims to diversify revenue beyond hardware to focus on software-based platforms. A Samsung representative stated, "The focus is on enhancing platform capabilities rather than drastic organizational changes," adding that the shift towards a service-oriented business model will accelerate.
The mobile sector is also facing difficulties. Samsung's combined operating profit for its Mobile Experience (MX) and Network (NW) divisions in the first quarter of this year was 2.8 trillion won, a 34.88% drop from 4.3 trillion won in the same period last year. The primary cause of this decline is the surge in memory semiconductor prices, which are expected to continue rising, making profitability management crucial.
Despite these challenges, Samsung plans to enhance its mobile competitiveness by continuing to innovate its Galaxy S series and foldable products, as well as strengthening AI features. The company is preparing to launch smart glasses in the second half of the year and aims to increase the premium product share by enhancing features in wireless earbuds and Galaxy Watches.
While halting appliance sales in China, Samsung will continue its mobile operations there. The company plans to release locally tailored smartphones, such as the Galaxy W series, and promote Galaxy AI features. However, it remains uncertain whether this will help regain market share against local competitors like Huawei and Xiaomi.
The struggling Network division is undergoing personnel changes and increasing technology investments. In 2024, about 700 employees from the Network division were reassigned to other divisions to improve organizational efficiency. Concurrently, the company is focusing on securing next-generation technologies for the AI era. Since establishing the Next-Generation Communication Research Center under Samsung Research in 2019, it has been researching 6G technologies. Recently, it achieved transmission speeds nearly twice as fast as 5G in the 7 GHz frequency band, a key candidate for 6G.
An industry insider noted, "The DX division is looking to improve performance by expanding its B2B revenue model beyond traditional B2C. With increasing low-cost competition from Chinese firms, relying solely on hardware sales shows clear growth limitations, necessitating a shift towards platforms, services, and AI."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.