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Las Vegas, NV - Samsung On Track To Become World's Top Home Appliances Maker

Published on: January 9, 2013 08:27 PM
By: Reuters
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President of Samsung Electronics' Device Solutions, Dr. Stephen Woo, introduces the Samsung Exynos 5 Dual Processor during the keynote speech on the second day of the International Consumer Electronics Show in Las Vegas, Nevada, USA, 09 January 2013.  EPAPresident of Samsung Electronics' Device Solutions, Dr. Stephen Woo, introduces the Samsung Exynos 5 Dual Processor during the keynote speech on the second day of the International Consumer Electronics Show in Las Vegas, Nevada, USA, 09 January 2013.  EPA

Las Vegas, NV - South Korea’s Samsung Electronics Co said it is on course to achieve its goal of becoming the world’s top home appliances maker by 2015, with sales growing an estimated 50 percent by then.

Samsung Electronics, which makes more chips, flat-screens, handsets and TVs than any of its competitors - including the world’s best-selling smartphone - is aiming to boost its home appliance segment and narrow the gap with companies including Whirlpool Corp and Electrolux AB.

“I’m confident of Samsung becoming the world’s top appliances maker by 2015 with $18 billion sales, as we set up a very well structured framework for key products and moving step by step to the goal, first starting with fridges,” Yoon Boo-keun, president of the division, told Reuters in an interview at the Consumer Electronics Show in Las Vegas on Monday.

Analysts estimate Samsung Electronics earned around 13 trillion won ($12 billion) last year from home appliances, part of the firm’s consumer electronics arm.

Samsung Electronics would ditch unprofitable product lines and boost research into consumer tastes across different markets, Yoon said.

“It’s a business that can ensure steady cash flow with little earnings fluctuation, once you have a proper system in place,” Yoon said. “It’s not dull at all and has great potential to become Samsung’s next earnings driver.”

MR TV AIMS FOR GROWTH

Yoon, who was head of Samsung’s TV business until 2011, was put in charge of the thin-margin home appliance division a year ago with a mission to match the TV outfit’s success.

Known as Mr. TV, he had a pivotal role in ending Japan’s more than three decades of leadership in the global TV industry in 2006.

“We see lots of opportunities in the appliances segment but we didn’t strongly grow the business - simply, it didn’t get proper treatment,” Yoon said after unveiling a new four-door Internet-connected fridge at the electronics show.

His remarks come only hours after Samsung Electronics said it likely earned a record quarterly operating profit of $8.3 billion, aided by roaring sales of smartphones.

Samsung’s CE division is estimated to have earned around 13 trillion won ($12.22 billion) of revenue in the fourth quarter, or roughly a quarter of its total revenue.

TV sales generally account for around 70 percent of CE performance, and the rest comes from selling appliances such as fridges, ovens and laundry, according to analysts. Samsung does not provide breakdowns.

It’s been a low-margin business compared with smartphones, which generate around 25 percent of margin, and the division’s operating profit contribution is estimated at around 4 percent.

Yoon also said Samsung, the world’s top maker of TVs, was aiming to sell 55 million flat-screen TVs this year, up from 51 million last year, even as the industry is set to remain stagnant due to the weak global economy.

Betting large TVs with over 65-inch screen sizes will lead the growth, Samsung Electronics unveiled three models of ultra high-definition (HD) TVs that boast four times better picture quality than full HD models.

ACQUISITIONS IN MEDICAL SECTOR

Yoon also heads Samsung’s corporate design centre and oversees the medical equipment business, which was added to the consumer electronics division this year.

Samsung Electronics acquired a controlling stake in Korean ultrasound equipment firm Medison in 2010 and its affiliate later for around $300 million in total, its biggest ever acquisition in the healthcare industry.

Yoon expected sales from its medical devices would reach $500 million this year, up from $300 million last year, and will grow with the acquisition of companies that make MRI scanners and computed tomography machines.

Samsung Electronics has said it plans to spend 1.2 trillion won in the medical equipment business by 2020 to make it a $10 billion operation by then.

In the long run, Samsung Electronics aims to become a global healthcare leader, taking on GE, Philips, Hitachi, Toshiba and Siemens. ($1 = 1064.0000 Korean won)


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Read Comments (11)  —  Post Yours »

1

 Jan 09, 2013 at 10:20 PM Supermom Says:

They do have amazing stuff. I've got a Samsung fridge & it's a great appliance. Does anyone know which Samsung phone they were referring to?

2

 Jan 09, 2013 at 10:44 PM motivation Says:

What happened to American ingenuity? Profits are a bigger concern than what consumers want which in the long run allow other countries to surpass us.

3

 Jan 09, 2013 at 11:01 PM OyGevald Says:

Reply to #1  
Supermom Says:

They do have amazing stuff. I've got a Samsung fridge & it's a great appliance. Does anyone know which Samsung phone they were referring to?

Yes sweetie, its the Samsung rOtary phone. The kind you got your fat finger stuck in the round dialer.
;)

4

 Jan 09, 2013 at 11:16 PM Anonymous Says:

Sure its the galaxy SIII

5

 Jan 09, 2013 at 11:36 PM Samsung Fan Says:

I bought a Samsung color laser printer/copier in August. What a great piece of technology it is! Does clear, crisp copies, and has a nice, compact design.

I was going to buy the HP printer, but I was at Staples and the Samsung was lighter, looked good and copied perfectly. Plus it was on sale. I am so happy that I went with the Samsung. The color cartridges are not cheap, though. That is the only cheesaron. But otherwise......we love it!

6

 Jan 10, 2013 at 05:09 AM MBYIsrael Says:

Reply to #5  
Samsung Fan Says:

I bought a Samsung color laser printer/copier in August. What a great piece of technology it is! Does clear, crisp copies, and has a nice, compact design.

I was going to buy the HP printer, but I was at Staples and the Samsung was lighter, looked good and copied perfectly. Plus it was on sale. I am so happy that I went with the Samsung. The color cartridges are not cheap, though. That is the only cheesaron. But otherwise......we love it!

That's great to know. I need a new printer and HP is garbage. How about the ink cartridges? How long do they last?

Like #1, I bought a Samsung fridge 4 years ago and love it. Here in Israel a lot of flats have open plan living/dining/kitchen and are small. The fridge is virtually silent even in that situation and is very efficient. The only thing I don't like is that the handle isn't reversible if the position of the box changes. This should be standard on all single door fridges. I liked that they had a cost saving plastic case with a stainless front. Looks expensive but wasn't.

7

 Jan 10, 2013 at 05:10 AM Anonymous Says:

Reply to #5  
Samsung Fan Says:

I bought a Samsung color laser printer/copier in August. What a great piece of technology it is! Does clear, crisp copies, and has a nice, compact design.

I was going to buy the HP printer, but I was at Staples and the Samsung was lighter, looked good and copied perfectly. Plus it was on sale. I am so happy that I went with the Samsung. The color cartridges are not cheap, though. That is the only cheesaron. But otherwise......we love it!

How about black and white? How many pages will one cartridge print?

8

 Jan 10, 2013 at 08:13 AM Reb Yid Says:

This reads like a press release from Samsung, not a researched article. It says, basically, "Samsung will be the leader because Samsung says so."

9

 Jan 10, 2013 at 03:03 PM ShmuelG Says:

Reply to #2  
motivation Says:

What happened to American ingenuity? Profits are a bigger concern than what consumers want which in the long run allow other countries to surpass us.

Here is something you fail to understand that all adequately intelligent people do: with very, very few exceptions, the company would make a profit only when they can provide "what consumers want." So, the more companies make profit their highest concern, the better it is for consumers.

10

 Jan 10, 2013 at 10:00 PM Yossel Says:

Reply to #9  
ShmuelG Says:

Here is something you fail to understand that all adequately intelligent people do: with very, very few exceptions, the company would make a profit only when they can provide "what consumers want." So, the more companies make profit their highest concern, the better it is for consumers.

No, it doesn't. Profit can also come from cost-cutting. Like moving jobs overseas and slashing benefits.s

11

 Jan 11, 2013 at 02:58 PM ShmuelG Says:

Correct. If the regime didn't burden the productive companies with draconian regulations, it would still be profitable to conduct business here. Any company's prime concerns should be perpetuating itself and maximizing its profit. If that can be accomplished by relocating, the company is obligated to do so.

12

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