Almost 200 Samsung managers have opted to voluntarily return a quarter of their first-half bonuses in a bid to help mitigate the upcoming quarterly report, which will show a decline in profits and consumer demand. Samsung itself is facing some issues with slowing market growth and heightened levels of competition from the industry as a whole, leading to the company releasing an operating profit guidance falling short of analysts' predictions.

This decision to return parts of their bonuses is believed to have been partly a gesture to show managers taking responsibility for the decline in revenue, according to the report over on Reuters. Local media in South Korea reports that the combined total of returned bonuses would likely exceed 3 billion won ($2.92 million), which isn't a bad donation to the company. Samsung will share its revenue report later this month for the previous quarter.

What do you make of the managers returning bonuses and how do you feel Samsung can effectively compete against Apple and other competitors (without transforming Heathrow's Terminal 5)?

Source: Reuters


Reader comments

Samsung managers voluntarily return part of bonuses prior to quarterly report


They should stop creating so many variations & more importantly, stop screwing existing device owners (if they want repeat business) !

Agree!! They need to stand up to AT&T and Verizon as well and refuse to lock bootloaders! There are so many reasons to both love and hate Samsung. The good thing is that now, hopefully, they realize that they can no longer sit back and arrogantly dictate what consumers are going to get. They are no longer as invincible as they once were. This is good news for consumers. It means that they will be forced to try harder to give us what we want.

1. Make Touchwiz optional!
2. Unlock the bootloader
3. Quick turnaround on OS updates.
4. Commit to updating older devices (many consumers are shying away from Samsung because of poor update timelines in the past).

Your wish list is justified, but quite honestly those are mostly demands that appeal to the "geeks" among us. The average Galaxy customer isn't worried about boot loaders, optional overlays and to some extent quick OS updates. They just want a device that works, and the thing is most phones people have these days work really well. The incentive to upgrade every year is all but diminished, thanks also to greedy Carriers (in the U.S) and their stingy data plans. Add to that an all but saturated smart phone market and you have a recipe for reduced sales. This is the nature of things in business and now they must look elsewhere i.e., wearables to elicit excitement.

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yup... definitely a list of niche requests. you're in the minority, so dont expect any of this.

besides, this isnt just a sammy issue, these are all true with every manufacturer.

I'll preface this by saying I'm not here to defend Samsung, I own no Samsung products (except for a Galaxy S2 my sister gave me to use as an MP3 while running, and it's rooted running CM). I'm using a (rooted) OnePlus One and an LG G Pad GPE. But I want to address the armchair pundits all in one post.

1. Most average people (aka, those that don't post on AC) like Touchwiz. What we refer to as "gimmicks" people use every day while using their phone. I let my sister use my Nexus 5 when I had it, and she complained that she was missing some features that stock Android doesn't have.

2. Outside the tech community, no one cares whether or not they can unlock a bootloader. I'd wager that most don't even know what a bootloader is. I want a phone that I can root and install whatever rom on, but the other 7 members of my family don't. They all use a Samsung device, and are perfectly happy with it.

3&4. Again, most people don't want an update. Samsung pushed one out this Spring for the GS3 (I think 4.4?), and I got a call from my mom asking why it didn't work like it used to, and how she could change it back. I ended up telling her how to turn off future updates.

TL;DR, only us tech nerds dislike Touchwiz and care about bootloaders and updates.

My Wife and my Mom could care less about bootloaders, rooting, and custom ROM's . All they want is a device that they can use daily without major hassles. I've had to deal in the past with explaining to them how to make stuff work like they're used to when the manufacturer pushes out an OTA update that changes something. I've since advised them to NOT accept any OTA updates until I've had a chance to research it and can ask them if they want the update or not.

From the DeathStar using my rooted LG G2

1) It is optional, if you buy a GPE device. Besides that, it's *never* going to happen. You can easily replace the TouchWiz launcher, if you just really hate the way it looks (I don't blame you), so it's really not that big of a deal. As for just "turning off" TouchWiz, that suggestion shows a lack of knowledge about how these things work. TouchWiz is not just a launcher or "overlay". It involves changes to the core AOSP code and is not something that can be "turned off".

2) Also never going to happen. Bootloaders are usually not terribly difficult to unlock, if you at least know where to look to get the info. Selling a device with an unlocked bootloader would not only open up carriers to a *huge* increase in support calls, but also create a security nightmare as people did things they shouldn't because they didn't know any better.

3) OS updates are a whole different conversation. Hopefully, as Android matures and Google gets the newer code out to OEMs sooner, we'll see turn around times improve. A nexus device is still the only way to guarantee quick OS updates.

4) Actually, Samsung has gotten *much* better than they used to be. A few years ago, I recommended people not buy Samsungs for this reason, but I don't feel the need to include that warning. As for updating "old" devices, the OEM's have agreed to support devices for at least 18 months, which should get you at least two major Android versions. Beyond that, and it becomes an unrealistic amount of effort to make code changes and pass carrier certification tests for the exponentially increasing number of device models. At least with Google Play Services, it's not as severe of an issue as it once was if you're stuck on an older device.

All that said, competition is *always* good for the market. It will make all the OEM's work harder to compete, which can only be a good thing for consumers.

Maybe they should stop investing in Tizen, save money that way.

>I'm the kind of guy who stops a microwave at one second to feel like a bomb defuser.

This is what is wrong with big business. If the company has underperformed why are they getting large bonuses anyway.

Well they still made a massive profit with approximately 6 b in net so it's kinda weird why they would return bonuses like that (i know I wouldn't lol)

You can't look at it as whole in this scenario. Samsung is a massive entity with several divisions. Some can be doing extremely well while others are not. This article does not say which managers (unless I missed that) were returning bonuses. Those that were in charge of underperforming departments/divisions may well have never recieved a bonus to begin with, and what we are reading of is those who oversaw profitable areas returning some of what they earned to help with the overall financial health of the company.

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So true. Speaking from my other nerd side of me...I'm a PC modder. Samsung hands down OWNS the SSD market. Samsung kills TV/Monitor panel sales also. So they are doing damn well there.... I think phones were not even close to where they wanted it to be. I remember prior to the S5 launch, they said expect lower sales due to lack of upgrade incentives. Hell they recently made an add imploring S3 owners to upgrade...does that not speak volumes?

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They still made massive profits, just not the massive profits that investors thought they would make.

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Samsung may be able to effectively compete against Apple and other competitors by focusing on producing a sophisticated innovative high quality attractive uncluttered utilitarian device competitively priced.

As Samsung holds a 31% market share compared to Apple's 15%, , I'd say they already do a fine job at competing with the other players in the smartphone market.

[as of April, 2014]

This is all just a PR move. In the big picture, the managers giving up a small part of their bonus has no impact on the overall profits. And this information would not have been "leaked" to the public, it just would have been done and that's it.

I also think it's funny that they made a point to say "managers". If you read between the lines, this clearly excludes the company upper leadership and officers.
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I'd like to know the difference between managers and Executives.

Managers are supervisors of divisions that report to Executives. I'm guessing they chose their words wisely here and Executives did not give up their multi-million dollar bonus'.

How in the world you think samsung will effectively continue to compete with Apple when they do not control the ecosystem. Samsung benefited first from apple picking them to help with the manufaturing of the original iphone, then got lucky again when google gave them an os to put on top of the hardware. If android was not available, samsung would have been in the same boat as bb or they would be selling windows phone. Samsung benefited by being at the right place at the right time and was able to used they scale, their marketing dollars to execute their plans. During all this time their never develop their own ecosystem which their control. It's tragic they learned nothing from the pc oem's, because that's where they are headed. It will take a few years but they have peaked and now all the chinese oem's are gunning for them and they have no differentiation to speak of. Google will continue to push for zero dollar hardware on android and all those oem's will find themselves in the same position that pc oem's are now where there is zero margins for them to play with while google will continue to laugh all the way to the bank.

Excellent analysis!
Even with further commoditization of smartphones, there will still be winners (Lenovo) and loosers (Gateway) as with pc's among manufacturers. Success will be based on innovative design and manufacturing and distribution channels efficiency.

True, but there is not much money/margins there. While the chinese oem's might be fine with little to no margins samsung can't survive that way. That's their dilemma here, Xiaomi already tell us they are fine selling at costs, but can samsung do so without their stock taking a plunge. Xiaomi can do so because they are a privately held company, samsung is a publicly trated company.

Xiaomi can't sell devices at no profit forever. And it's not like we're talking about Samsung being in danger of going backrupt, here. We're talking about making $6.2b instead of the expected $6.3b (or whatever the number was). I think they'll be fine.

Besides, Samsung sells a *lot* more than just mobile devices. Even if they scale back on how many different models of mobile device, they're not going to be in any kind of financial trouble any time soon.

Ok, $2.92 million divided by 200 managers... That's about $14,600 per manager. The article said that was 1/4 of their first half bonus, so that means the average bonus per manager is $58,400. Since it's just the first half bonus, their annual bonus could be as high as $116,800!

They should have 32gb versions of each phone released the same day the 16gb models do! The 32 gb Galaxy S4 was over 2 weeks after release of 16 gb and there's still no 32gb S5 in the USA! And yes I have maxed out storage in my S4 and card so many times that I have to delete stuff just to update apps

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We need a real upgrade and lead complacency from them. Maybe it won't be bad if they can reduce prices as well. A phone like One plus One is a real threat, Motorola as well is introducing phones with great specs and features at a lower price. They must take competition very serious now. We need our space, far less bloatware. We are wise and intelligent at Android, we won't buy crap just because of the name.

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I own a OnePlus One, and it isn't competition to Samsung. It's a much better phone (in my eyes) than the Galaxy S5, but it's a heck of a lot harder to get ahold of. And, you can't use it on Sprint or Verizon, a big (in the US) segment of the market. As for Motorola, they've been losing money for years, and are being sold by Google because they can't perform.

The other problem is the carriers. OPO is selling their phones directly, so they don't have to deal with the carriers. I have heard several stories about how the carriers actually work to set the prices of these things. And, as bad as we think it is in the States, it's often much worse in other parts of the world. Devices that cost $600 in the US often go for $1000+ in other parts of the world.

As for a "real upgrade", I'm not exactly sure what you mean. At some point, we hit the limit of what is technologically possible. Modern smartphones are *insanely* powerful, with flagship devices rivaling low-end laptops in terms of processing power.

Considering just a few years ago, the idea of a 1ghz single-core device was described as "a tech junkie's wet dream" and now we're looking at 2.5ghz quad-core devices, you can't honestly expect that rate of improvement to keep up forever. We're going to see a substantial slowing of the "spec war" as we hit the limit of what we are technologically capable of manufacturing.

This would never happen in the United States. They would just lay off a gauntlet of minions.

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1. Return all of your bonus. Otherwise you are still rewarded for failing.
2. Submit a document detailing what you did that contributed to the loss and what you will do differently.

Posted via Android Central App using an LG G2.

2. We forgot to put the 13 month self-destruct code in. Our customers have been too happy with our devices, and are not replacing them since they are reaching the point of "good enough"

"Submit a document detailing what you did that contributed to the loss and what you will do differently."

Big difference between "a loss" and just not making as much profit as last year.

No one is even talking about HTC yet you still had to make a stupid comment classic Jay troll.

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I say they should stop making ugly devices. I have stopped buying Samsung Galaxy phones ever since the S2. I got the S3 but returned it within my 14 days because I couldn't stand the cheap look and feel. I've pretty much cast Samsung aside as a phone to consider. And I'm sure I'm not alone. Instead, I got the LG G3. Sexy phone. I hope this forces Samsung to fire whatever awful person they have designing these things and hire someone new.

While you're certainly welcome to your opinion, you should not expect your opinion to be the only one in existence. I can promise you that many, many people do not see Samsung devices as "ugly".

When did I try and force my opinion on others? I simply stated mine. It is an ugly phone. You can think they aren't ugly. But I shouldn't have to preface every opinion with ... "This is my opinion. You are welcome to have your own." When you say it is a good looking phone, do you clarify that it is simply your opinion and you are free to think it us ugly?

Exactly. And that one was prefaced with the words "I hope" inferring my opinion. In no way am I forcing my opinion on others. I do hope they get fired and replaced with better designers. You ... may like them. That's perfectly cool. But I still don't know where you get the idea that I expect my opinion to be "the only one in existence". You need to calm down and stop being so defensive. I think all Samsung flagship phones are ugly. I hope their designers get fired. You love their phones. You hope they don't get fired. All perfectly valid sides. You can express your love for them. I happen to disagree. Nobody has said that my view is the only one. The chill pill is the blue one. Take it with water.

At least the managers didn't get a year subscription to the Jelly of the Month Club for their bonus. That would have sucked giving that back. It's the gift that gives all year long, Clark.

Some might not agree here but IMO, before you try to make the geeks happy (which unlocked boot loaders and TouchWiz reduction) make the general public people more happy. The general public / non tech compare Samsung directly to Apple.. Not only for products but flt services as well. Not that I'm a fan of Apple help or services but I believe it is still light years ahead of Samsung. Samsung simply has too many product lines and they need to develop proper support processes. Many a tkmr ice seen owners of Galaxy Phones that should have issues rectified be thrown around the mill resulting in the typical "Going to go back to Apple!"

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"flt services" There's a lot of typos, so it's hard to be sure if I just don't know the term, or it's a typo. Apple is definitely ahead of the curve with customer support via the Apple stores. But I've still seen *far* more people move from Apple to Android and be ecstatic about the change than the other way around.

I really don't think that Samsung has anything to worry about. Although they don't make my favorite Android phones, they have a huge following and are almost synonymous with Android (unfortunately). As long as they continue to deliver phones that meet people's wants (or tell them their wants), Samsung will do fine

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The big mistake Samsung made with the S5 was it being 16GB when it should have been 32GB.

Samsung shot itself in the foot several times recently with arrogant anti consumer moves.

Knox should be optional and every phone should have a stock Android option.

The LG G3 is setting the bar at $580 and 32GB and the Quick Circle Case with wireless charging at $30

All the comments that say only geeks want TW reduced are wrong. Every non-geek Samsung owner I know, hates it. They don't know it's called "Touch Wiz" all they know is that the device is cluttered with a bunch of "apps and stuff I don't know what to do with" and "it's slow".........that's just TW in their words. That's why I have issues with Samsung, because to the average Joe, Samsung IS android. Then they're surprised that I (the Android guy) don't even use a Samsung.
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There are a few reasons why Samsung's profits are down IMHO.

1) The postpaid carrier model in some countries makes it tough financially for people to upgrade. People don't want to pay $90+ a month for service and pay outright for a phone - they won't upgrade until their contract is up.

2) If you own a 2013 flagship phone like the SGS4, SGN3, HTC One, LG G2 - why would you upgrade to a 2014 flagship phone like the SGS5? The S5 doesn't offer much over any of the 2013 flagships. People that bought a phone outright in 2013 don't see a reason to upgrade.

3) The SGS4, SGS5, and SGN3 are expensive phones. Why buy an expensive $500+ phone when you can buy a Nexus 5 for $100 less or a Moto G for $300 less? Phones like the One Plus One and Xiaomi Mi3/Redmi Note are starting to gain a bit of traction for offering good specs for a small price. The Moto G is Motorola's best selling phone ever for a reason - it offers a lot for a low price.

The Moto G is a very good phone at a good price but limiting the LTE model to 8GB doesn't make sense to me.
I'd buy a 16GB or 32GB for family members in a heartbeat.

ah the korean culture. the company will EARN $7.1 BILLION in PROFIT instead of the $8 BILLION it was "expected" to earn, so the team is shamed into returning $2.92 MILLION dollars from their paychecks? do i have that about right???