Heir in jail, Samsung still rings in record quarterly profit

Seoul: Samsung Electronics logged on Tuesday a record profit of $10.0 billion for July to September and announced a sweeping reshuffle within top management as the South Korean tech giant seeks to maintain its market lead while its heir is in prison.

The world's biggest memory chip and smartphone maker has faced multiple challenges since last year, including a humiliating recall of its flagship Galaxy Note 7 handsets and a corruption scandal that engulfed its de facto leader.

But its third-quarter net profits soared 148 percent on the same period a year ago, it said in a statement, thanks to strong demand for its memory chips and a recovery in smartphone sales with the roll-out of the new generation Galaxy Note 8.

The figures come only two weeks after chief executive Kwon Oh-Hyun resigned, saying the South's biggest firm was facing an "unprecedented crisis" and its current profitability was "merely a fruit of decisions and investment made in the past".

The firm described Tuesday's numbers as an "overall robust performance".

Operating profit nearly tripled on-year to 14.5 trillion won – also a quarterly record – it said in a regulatory filing, while sales surged to 62.05 trillion won, another all-time high.

Samsung Electronics is the key subsidiary of the sprawling Samsung Group, whose heir Lee Jae-Yong was found guilty in August of bribery, perjury and other charges stemming from payments to the secret confidante of ousted president Park Geun-Hye. Lee, who was jailed for five years, says he is innocent and is appealing.

The firm also announced Tuesday the first major reshuffle in its top leadership in three years. It had not made any radical changes at the top since group chairman Lee Kun-Hee suffered a heart attack in 2014 that left him bedridden.

Samsung, which has a team of three CEOs each leading its semiconductor, mobile and TV units, said Kwon's role as the head of the semiconductor business would be taken by Kim Ki- Nam, a younger manager in chipmaking operations.

Lee Sang-Hoon, known to be close to the group's founding Lee family, will leave his position as the firm's chief financial officer to take the chairmanship of the board, a role previously held by Kwon.

Tuesday's announcement also saw HS Kim replacing Yoon Boo- Geun as the head of Samsung's home appliance and TV unit, and DJ Koh replacing JK Shin as the mobile chief.

The 2017 Galaxy Note 7 recall – due to exploding batteries – also dealt the firm a crippling blow to its mobile business.

S Korean tech giant to build IoT products on mass scale

Seoul: South Korean technology major Samsung is drawing up plans to commence mass production of IoT-enabled products in the consumer durable space in the next 2-3 years, a top company official said.

This is expected to make this high-end, cloud-based connected technology more affordable for developing markets and emerging economies. IoT stands for Internet of Things.

Samsung, which recently launched its first IoT-enabled washing machine in India, plans to introduce more connected appliances that can be controlled through devices such as smartphones.

Asked about the timeframe, Samsung Electronics Executive Vice-President (Product and Innovation Team of Mobile Communications Business) Patrick Chomet said: "In the next 2-3 years, the company would start mass production of IoT-based devices... I would expect that (IoT connectivity) would be quite happily available for mass market devices."

The company expects its mid-segment products to be IoT- driven as well. Currently, only a few top-end models in key categories have such features.

IoT refers to a network of devices and sensors connected through the Internet.

The Korean chaebol had started investing in IoT and cloud technologies many years ago.

"Investment to plan the technology and build the technology for IoT and cloud started several years ago. The investment on artificial intelligence started several years back," he said, adding that "we believe we have a very competitive portfolio".

The company has announced to launch the second edition of its voice-powered digital assistant 'Bixby' by the next year that will work on multiple devices, including televisions and refrigerators. pti