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Samsung Electronics has expressed a public apology to its shareholders, employees, and consumers. The apology follows the announcement of the South Korean tech giant's Q3 2024 earnings outlook, which showed that its anticipated profits were below expectations. Samsung's newly appointed Vice President of Device Solutions, Jeon Young-Hyun, acknowledged the company's recent difficulties, especially in the area of innovation, in an open letter. Here are five key points to understand why Samsung addressed these issues.
1. Acknowledgement of Declining Innovation
Jeon Young-Hyun acknowledged in the letter that Samsung had not been upholding its image as an innovator. Once regarded as industry leaders, the company's semiconductor and smartphone divisions have come under increasing fire for failing to produce ground-breaking innovations. Customers are disappointed since several of Samsung's most recent smartphones, such as the Galaxy S24 Ultra, are perceived as being too identical to earlier generations.
2. Unsatisfactory financial outcomes
For Q3 2024, Samsung estimated an operating profit of about 9.2 trillion Korean won, or $6.8 billion. Despite showing profitability, this number was below market expectations, which raises questions about the company's performance going forward. Analysts and investors are starting to wonder if Samsung can keep up with the tech industry's rapid developments, especially considering its past dominance in key areas.
3. Strategies for Deep Change
To address these issues, Jeon Young-Hyun pledged that Samsung would concentrate on gaining "fundamental competitiveness." The company wants to pursue long-term technology breakthroughs that have not yet reached the market, rather than putting temporary fixes into place. Jeon stressed the value of innovation and creativity, saying Samsung will work to set the standard for the future.
4. Improving Organisational Culture
Jeon's letter also emphasised Samsung's need for an improved internal culture. He demanded that the organisation's internal communication be enhanced and that any new problems be addressed quickly. This emphasis on organisational development seeks to empower employees and promote a more creative atmosphere, both of which are essential for future expansion.
5. Uncertain Future
Despite the fact that Samsung's public apology shows a strong commitment to reform, many people are still sceptical about the company's ability to keep its word. Only time will tell if the tech giant can regain its position as an industry leader, given its high standards for innovation and advancement.