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Last updated: Thursday, December 17, 2009

At first glance, this might seem an odd time to push through a shakeup at Samsung Electronics. The Korean giant has weathered the financial crisis far better than Japanese rivals like Sony and Panasonic. Samsung is the world’s largest maker of memory chips and its market dominance is unquestioned. When it comes to building a powerful brand, no Korean company has been more successful. As Americans shop for Christmas and Hanukkah presents, Samsung’s TVs and digital phones are among their top choices, while Samsung’s mobile phones are so popular that the company is now second only to Nokia among cell phone makers worldwide. Yet on Dec. 15 the company announced a management reshuffle that marks the exit of an older generation of leaders who built up Samsung as a prominent hardware maker. The world’s top maker of TVs on Dec. 15 named Choi Gee Sung, the head of its TV and cell phone business, as CEO, replacing Lee Yoon Woo. Perhaps more important, the company created a new position, that of chief operating officer, for Lee Jae Yong, the only son of former chairman Lee Kun Hee. Why make the change now? Some Samsung watchers have a one-word answer: Apple. For all its success in consumer electronics, they say, Samsung is an also-ran in the battle to win customers away from Apple’s iPhone. This means the company needs a new direction if it has any hope of meeting the challenge from Apple and its smartphone. “Samsung must have taken a whopping blow from the revolutionary popularity of the iPhone,” says Park Kyung Min, a longtime watcher of the biggest Korean company and chief executive of fund manager Hangaram Investment Management. “To emulate Apple it needs a new start.” Lee Jae Yong’s Restoration To Power It’s not clear that the changes Samsung announced [Tuesday] are…

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Apple Envy Drives Samsung Shakeup

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