(Bloomberg) — 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 will seek to retain the dominance in TVs while challenging key customer,
rival and legal adversary Apple Inc. for supremacy in the $219 billion global smartphone market.
“The promotion strengthens Lee’s powers in dealing with
Apple, both in the legal fight and in operations,” said James Song, an analyst at Daewoo Securities Co. in Seoul. “Lee will continue to make efforts to solidify the company’s position in areas where it’s already performing well, rather than taking bold actions on new growth business.”
Samsung shares rose 0.2 percent to 1,433,000 won as of
10:25 a.m. in Seoul trading, extending their gains this year to 35 percent. With a market capitalization of $194 billion,
Samsung is the world’s 15th most-valued company, according to data compiled by Bloomberg. Apple is the largest at $541
The younger Lee, 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.
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, 70, who took over for his father — the
group’s founder — as chairman in 1987, Samsung surpassed the market values of Hewlett-Packard Co., Sony Corp. and Toyota
Lee Kun Hee also ended Nokia Oyj’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. He’s worth $10.7 billion as his
wealth increased 34 percent this year, according to the
Bloomberg Billionaires Index. His son owns more than $1 billion of Samsung Electronics stock, according to data compiled by
Lee Byung Chul, who founded the group in 1938, 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 as well as an 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.
The company sells one in four flat-panel TVs worldwide,
according to data from DisplaySearch. Korean rival LG
Electronics Inc. was No. 2 and Sony No. 3 in the quarter ended in September.
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 in October. In overall handset sales, including basic types, Samsung
remained the top seller, researcher IDC said separately.
Apple and Samsung are 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.
In addition to Lee’s promotion, Samsung named Kim Kinam
president and chief executive officer of Samsung Display Co., according to the statement. Cho Soo-in was appointed head of the company’s medical equipment business and Park Dae-Young was
promoted to president and CEO of Samsung Heavy Industries Co., the world’s second-biggest shipbuilder.
To contact the reporter on this story:
Jung-Ah Lee in Seoul at
To contact the editor responsible for this story:
Michael Tighe at