The world’s largest smartphone vendor faces another difficult year after a 2015 was plagued by economic turbulence and volatile exchange rates, chief executive Kwon Oh-Hyun said in a letter to shareholders.
At the gathering, Samsung formally adopted a proposal to allow non-CEOs to take up the chairman’s role for the first time, a move that signals efforts to improve governance.
The pool of candidates now encompasses qualified executives as well as independent board directors, said Kelly Yeo, a spokeswoman for the company.
South Korea’s largest conglomerate is in part reacting to criticism after the sale of a subsidiary to another unit, in a controversial 2015 deal that helped cement the Lee family’s control of the empire.
More immediately, Samsung Electronics — the maker of Galaxy smartphones and the group’s crown jewel— is fighting to protect its market share from Apple and Chinese rivals like Huawei Technologies Co and grappling with declining semiconductor and consumer electronics prices.
“We expect core products of our company, such as smartphone, TV, and memory, will face oversupply issues and intensified price competition,” the CEO said in his annual letter.
“We expect that 2016 will also be a tough year,” he said.
Samsung Electronics in January reported a quarterly profit that fell short of expectations by almost 40% and said it expects slowing demand for smartphones and more global economic headwinds this year.
The company is investing in new technologies such as foldable mobile displays to try and boost profit.
“Even under the challenging circumstances, we will renew everything from our product development and management to the organisational culture in order to lead the new era and become a true first mover,” Mr Kwon said.
Apple — Samsung’s biggest customer — has predicted its first sales decline in a decade. Apple CEO Tim Cook said the maker of iPhones was seeing “extreme conditions” unlike anything it had ever encountered, with economic growth in China at its weakest pace in 25 years.
Samsung has however joined the race to persuade smartphone users to start shopping with mobile wallets, competing with Apple and Google.
The South Korean company, which is banking on its Pay service to be a differentiator in a stalling smartphone market, has signed up 5m users and processed more than $500m (€453m) in transactions since debuting in the US in September.