The Korea Herald: Samsung names Lee vice chairman in patriarch’s succession plan
Samsung Electronics Co. promoted Lee Jae Yong to vice chairman, putting him a step closer to succeeding his father as leader of the world’s biggest maker of televisions and mobile phones.
The elevation from President and Chief Operating Officer is part of the executive leadership change to lead Samsung’s future growth, the Suwon, South Korea-based company said in an e-mailed statement today.
The appointment puts the 44-year-old Lee in line to take over from his billionaire father Lee Kun Hee, who transformed the former fish exporter into Asia’s biggest consumer- electronics company and helped the stock surge more than 100- fold in his 25 years as chairman. The younger Lee must find new areas of growth while challenging key customer, rival and legal adversary Apple Inc. (AAPL) for supremacy in the $219 billion global smartphone market.
“The promotion of Jay Y. Lee recognizes his outstanding achievements as a leader of innovation and as a change agent, which has led to Samsung becoming one of the world’s beloved brands and to a commensurate rise in shareholder value,” the company said in the statement. “Mr. Lee has also made invaluable contributions to the unprecedented growth of Samsung’s smartphone and TV businesses.”
Lee Jae Yong, who studied at Japan’s Keio University, joined Samsung Electronics in 1991. His roles included chief customer officer and vice president at the strategic planning division.
He was promoted to executive vice president and chief operating officer in December 2009, and a year later was named president. As chief operating officer, Lee strengthened relationships with customers and business partners and helped solidify Samsung’s chip and display businesses, the company said in a statement then.
Samsung Electronics is the flagship company in South Korea’s biggest industrial group, which generates about 20 percent of the nation’s gross domestic product.
Under Lee Kun Hee, who took over for his father — the group’s founder — in 1987, Samsung Electronics surpassed the market values of Hewlett-Packard Co., Sony Corp. and Toyota Motor Corp.
Lee Kun Hee also ended Nokia Oyj (NOK1V)’s 14-year run as the world’s biggest mobile-phone maker. Samsung shipped about one in every four mobile phones in the third quarter of this year, according to researcher IDC.
The elder Lee, a lung cancer survivor, is facing lawsuits filed by his older brother and sister in an attempt to win a slice of the family wealth. Their father, Lee Byung Chul, founded the predecessor of the industrial group in 1938 and died in 1987 without leaving a will.
The siblings’ demand for at least an $850 million stake in the group threatens to be a costly distraction at a time of intense industry competition. The civil trial started in May.
The younger Lee’s promotion comes as Samsung Electronics challenges Cupertino, California-based Apple, its biggest customer and its adversary in patent lawsuits on four continents. Samsung earned 7.64 percent of its revenue from selling chips, displays and other products to the iPhone maker.
Samsung reported record profit in the three months ended Sept. 30 amid surging sales of its Galaxy smartphone. More than two-thirds of the earnings were generated by the telecommunications business, according to the company.
Samsung shipped 56.9 million smartphones in the third quarter, giving it a record 35 percent market share, compared with 17 percent for Apple, Strategy Analytics said October. In overall handset sales, including basic types, Samsung remained the top seller, researcher IDC said separately.
Apple and Samsung are also battling in court over patents protecting their devices, with each accusing the other of copying their intellectual property. The companies have traded victories, with Apple winning more than $1 billion in damages Aug. 24 after a jury in San Jose, California, ruled that the South Korean company infringed six of seven patents.
Samsung is attempting to get the verdict thrown out based on claims the trial was tainted.