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Dramatic Executive Departures at Samsung this week shows the Extent of Turmoil that remains behind the Scenes

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On September first Patently Apple posted a report titled "Samsung's President of Consumer Electronics Surprisingly Reveals the Depressing Current Reality at Samsung." We noted in that report that in a rare speech, Yoon Boo-keun, president and CEO of the consumer electronics division of Samsung Electronics, expressed concerns about the unprecedented leadership vacuum within the tech giant, stressing that he feels like he is sailing without a captain. Boon-keun went on to say that they were missing opportunities and possible acquisition deals because of the current chaos.


The day earlier on August 30th, Patently Apple posted a report titled "Samsung's Vice Chairman Tells Employees not to get mired in Shock & Confusion over Last week's Verdict." In that report we noted that Samsung Electronics Vice Chairman Kwon Oh-hyun delivered an official statement to staff on the verdict on the firm's heir-apparent Lee Jae-yong, urging workers to continue giving best efforts. Kwon stated that "The business situation at home and abroad is too harsh for us to be mired in shock and confusion. We all need to join our strengths and wisdom to emerge from this unprecedented challenge," Kwon said.


Today we're learning that the same Vice Chairman Kwon Oh-hyun is stepping down at the end of tenure ending next March. Kwon who oversees Samsung's semiconductor and display business divisions has been serving as de facto leader of the company following the imprisonment of Samsung heir Lee Jae-yong. Samsung said he will retire from all his posts, including as board chairman.


In a formal statement Kwon stated that "It is something I had been thinking long and hard about for quite some time. It has not been an easy decision, but I feel I can no longer put it off."


Kwon's statement further revealed some rather stunning public revelations: "As we are confronted with unprecedented crisis inside and out, I believe that time has now come for the company to start anew, with a new spirit and young leadership to better respond to challenges arising from the rapidly changing IT industry.


Kwon added that the company is facing a grave situation despite making record earnings. "Record earnings are based on investment made in the past. But we are still struggling to find the next growth engine for the future," he said. 


Yesterday Samsung revealed that they replaced the development chief of its virtual assistant Bixby, Rhee In-jong, vice president and R&D head of software and services, possibly in a move to revamp the service amid lukewarm reviews, the report noted.


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Chung, who worked for Ericsson before joining Samsung in 2011, is a software specialist behind Samsung's security program Knox and Samsung Pay. He played a key role when Samsung acquired US AI startup Viv Labs, the original company that developed Apple's Siri.


The report went on to say that Bixby "is still struggling to pick up languages like English and Chinese largely due to Samsung's lack of data and specialists in foreign languages.


In September, Samsung had to offer a software upgrade that allows users to disable the Bixby button as many users complain they are annoyed by accidentally launching the assistant when they adjust volume."


As a heads-up announcement, the report noted that "Samsung plans to unveil the second-generation Bixby next week at a developers' conference in San Francisco. Viv Labs didn't participate in the current Bixby version that had already been developed before the acquisition." That's basically saying that the Viv Labs team is likely to take the wraps off of their leading technology to get Bixby back on track and in the digital assistant market they need before they launch their new smart speaker in 2018 (or sooner).


At the end of the day, two top Samsung executives spelled out a depressing situation at Samsung. To have both executives paint a dire picture of Samsung behind the scenes is unprecedented. What advantage is there to admitting the depth of their status publicly at this point in time? Is there more news on this front yet to come? Only time will tell.


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