April 20, 2024

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[THE INVESTOR] Samsung Electronics confirmed on May 10 it is carrying out a large-scale inspection program at its US operations but stressed it has nothing to do with sluggish sales of the latest flagship Galaxy S9 smartphone in the market.

“The inspection is not a punitive measure targeting a specific underperforming unit. It is a usual process aimed at reviewing the status of business departments and global offices,” a Samsung spokesperson told The Investor on condition of anonymity, denying an earlier news report.

“We usually address problems based on the results, if there are any.”

Samsung's mobile chief Koh Dong-jin

A team of Samsung executives and business consultants, led by Senior Vice President Ahn Jeong-tae, have been staying in the US for almost two months to review the overall management efficiency of Samsung Electronics America, the firm’s US headquarters based in New Jersey.

The team reportedly is doing an extensive review on a range of issues, including marketing schemes, cost structure, human resources and accounting. It is the first time that such a large-scale inspection is being conducted on the US operations except some occasional inspections into separate business teams.

Despite Samsung’s denial, the rare move is fueling concerns over the company’s falling smartphone sales in the US where almost one-fourth of its sales come from. The Galaxy S9 that debuted in March is said to be selling only 90 percent of its predecessor over the past months compared to the same period last year.

Industry watchers say no drastic changes in key features and fiercer competition with cheaper rivals have been dragging down the sales of high-priced premium phones not just the Galaxy S but also Apple’s iPhone in key markets.

“Samsung is likely to see some drop in profits in the second quarter due to the slowing smartphones sales together with a weaker demand for OLED displays,” Kim Dong-yang, an analyst at KTB Investment & Securities, said.

By Kim Young-won (wone0102@heraldcorp.com)