Samsung struggles to maintain leadership in mobiles

Samsung Electronics Co. became the largest manufacturer of smartphones in the world to sell handsets that work with the Android operating system, produced by Google Inc. Now, the cellular business of South Korean company needs to introduce new products to contain the growth of Chinese competitors offering cheaper devices based on Android.
In the first quarter, Samsung lost global market share of smartphones for the first time in four years, falling from 32.4 percent a year earlier to 31.2%, due to competition with companies such as Lenovo Group Ltd. and Huawei Technologies co., according to market research firm Strategy Analytics. Apple Inc. also saw its market share decline of 17.5% to 15.3%.
The Samsung's telephony sector is responsible for over 70% of its operating profit, which puts J.K. Shin, one of the Vice-Presidents of the area directors of mobile devices, under pressure to reverse the fall creating new hardware and software capabilities. In February, Samsung introduced the smart clock Gear 2, that works with the operating system Citizen, developed by Samsung itself. To go beyond the consumer market, Samsung also has been showing its security system via mobile Knox for companies and Governments from around the world.
In an interview with The Wall Street Journal on Samsung's headquarters, on the outskirts of Seoul, Shin, of 58 years, spoke about the Galaxy S5, the current flagship of the company, and as he seeks to stay ahead in the mobile segment. The following edited excerpts:
WSJ: How do you plan to counter the fall in the growth of its smartphones?
Shin: my main goal is to explore new opportunities in emerging categories such as "wearable" Electronics and mobility for companies [offering mobile devices and software for corporate clients], while at the same time strengthen the lines more sophisticated phones and low cost. I am also aware of the demands of the consumer to detect where there are unmet needs.
WSJ: critics say lack the Galaxy S5 innovative features. Which the differential of the appliance?
Shin: the Galaxy S5 is the only smartphone on the market and waterproof with detachable back. We've redesigned all components and use new materials, covering the rear USB inputs and headset, touch-sensitive screen and even the internal antenna.
WSJ: how are sales in the United States, where competition with Apple is big?
Shin: there's a certain loyalty to competitor's products. But our slice of the u.s. market has been growing and will grow even more. We monitor our market there weekly. Sales S5 Galaxy outscored the of its predecessor, the S4, also in the us. Despite the lack of a new amazing technology, the improvement of essential resources seems to be attractive.
WSJ: beyond Citizen [developed in partnership with Intel Corp.], in which other software you are concentrating?
Shin: inside the Galaxy S5, there's enhanced hardware and software. Design the camera sensor and the chip to process the signals, in addition to increasing the download speed and put a heart monitor.
WSJ: In what other areas you are currently focusing on?
Shin: Smartphone penetration is already high in many developed markets and we are entering a period of low growth. We need to look to new markets, such as Africa, where Samsung is already gaining ground.
WSJ: How do you think smartphones evolve?
Shin: flexible Screens [using folding screens and materials that make the curved or appliances with sides that fold] are a way to innovate. But we can't comment on future product plans. There will be the adoption of other physical monitoring, and heartbeat.
WSJ: why Samsung did not release a smartphone with the Citizen?
Shin: we want to make sure that all elements are ready. The Citizen was first used in our wearable devices and want to use it to connect with the various devices, such as cameras, vehicles and appliances.
WSJ: considers the Citizen an operating system for future tablets?
Shin: we plan to continue using the Android tablets for our future.
WSJ: the Samsung did not advance far in the tablets. What to do about it?
Shin: I announced the goal to sell 40 million tablets in a conference call with analysts in November last year. Our sales of tablets, exceeded this target in 2013. The goal for this year is also aggressive, and we are working hard to achieve it. We are preparing now another line of tablets for the more sophisticated segment. We are planning the launch of the new tablets in New York for the first time, since the u.s. is a big market for us.
WSJ: how is the reception of the Knox [Samsung mobile software solutions for business]? You've already closed contracts?
Shin: we're doing tests with various financial institutions and Governments around the world. I can't divulge more details about the contracts, but we already have paying customers.
WSJ: Samsung has about $ 60 billion in cash. You would participate in the cellular industry consolidation? How about buying the South Korean mobile maker Pantech?
Shin: there has been some consolidation in the industry. I can't comment beyond that.