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Changes in the OEM World

Maybe it's still early enough in the new year to think about starting fresh. Or maybe companies are seriously considering which operational areas work best and which don't. Or maybe they are launching in or expanding in other product segments to shake off the economic malaise from the last few years.

Whatever the reason, it seems some of the industry's more well known high-tech brands are taking interesting steps forward or testing out new corporate directions, either to supplement existing portfolios or to branch out into promising markets. Take a look at some of the news from the last few days about Samsung, Philips, and BlackBerry (formerly Research in Motion), and you might see a trend.

{complink 4751|Samsung Electronics Co. Ltd.}, which in the last few years has hung its hat on being one of the world's biggest smartphone providers and for going head-to-head with Apple for winning widespread consumer love, is now looking to build its clout in medical devices.

The company's US-based affiliate, Samsung Electronics America Inc., recently announced that it acquired medical imaging company NeuroLogica, known for its portable computed tomography scanners.

The acquisition supports the company's 2020 vision of becoming a world leader in the medical technology business and “to explore new avenues of growth in the healthcare business by enhancing medical imaging diagnosis, providing innovation to both patients and doctors,” according to a statement. As TechCrunch reported, Samsung has made several acquisitions and moves in this space for the last couple of years.

{complink 4267|Royal Philips Electronics N.V.}, another major electronics OEM, is going in a slightly different direction, shedding once-core units in the wake of organizational restructuring and a quarterly net loss. Following other companies like Siemens and Alcatel-Lucent, which also exited the consumer electronics market, Philips recently sold its audio, video, multimedia, and accessories business to Japan’s Funai Electric for about $201.8 million in cash and a brand-license fee, according to The Wall Street Journal. The sale will let the company focus on its now core medical and lighting sectors.

“With this transaction we are taking another step in reshaping the Consumer Lifestyle portfolio and transforming Philips into the leading technology company in Health and Well-being,” said Philips Chief Executive Officer Frans van Houten in a statement.

And {complink 4644|BlackBerry}, which has had more than its share of troubles in the last few quarters, at last unveiled a line of smartphones it hopes will restore some of its reputation in the industry. The long-delayed BlackBerry 10 devices, planned to launch last year, will finally start selling in March, a delay that disappointed investors, according to reports. To boot, the company is also formally changing its name to match its brand — it's now the company previously known as RIM. Whether or not the company will be able to stack up against powerhouses Apple and Samsung almost doesn't matter at this point. The point, on some level, I suppose, is that it's still trying, and that's worth something, right?

The winds of change seem to be kicking up in different pockets of the high-tech world. We'll see if it hurls them onto more stable ground, brings them into potentially lucrative and growing sectors, or leaves them wondering why they spun themselves in this direction.

15 comments on “Changes in the OEM World

  1. bolaji ojo
    February 4, 2013

    A short while ago, spinning off Philips Semiconductor was considered the solution to the parent company's problems. Both of them are still struggling even now.

  2. Cryptoman
    February 4, 2013

    Another sign of change in direction was indicated by Lenovo in its possible acquisition of Blackberry, which I mentioned not long ago in the following board message. http://www.ebnonline.com/messages.asp?piddl_msgthreadid=262673&piddl_msgid=929352#msg_929352

  3. FreeBird
    February 4, 2013

    Samsug's move could be a good fit–imaging requires displays at some point so there's some synergy there. Too bad about Philips, especially since so many of the products we use (or used to) came from their patented technology.

  4. prabhakar_deosthali
    February 5, 2013

    With so many mergers and acquisitions happening nowadays that the brand identity of many a products is getting affected and the consumers loyal to the once reputed brand -such as Philips or GE are getting confused . Similar confusion occurred when Lenovo took over IBM's Laptop business.

    In this changed scenario , the blind faith in a particular brand has now given way to the purchase based upon the product itself rather than the brand .

    This is one of the major change in my opinion because of the constant mergers and acquisitions

  5. elctrnx_lyf
    February 5, 2013

    This is really an interesting that is covering the major changes in stratageis of big OEM's. And prabhakar you have rightly pointed out the value of product lies with in itself rather than the Brand. I never though Blackberry will be able to come back and win hearts of customers. But now they seem to be coming back, I eally respect these people for the fighting spirit. The growth path for companies keep revisited by the leaders who can envision the future to make the business profitable and valuable.

  6. Jennifer Baljko
    February 5, 2013

    You're right Bolaji. And we see this often – the idea of spin-offs making leaner companies stronger. Sometimes it works, sometimes it doesn'y. I think how well the companies do post-spin-off has as much to do with the products being offered as the broader economic climate they spin off into.

  7. Jennifer Baljko
    February 5, 2013

    Cryptoman – yes, the Lenovo rumor was interesting, and it will be even more interesting to see how the major Chinese PC maker strengthens its mobile device market (tablets and smartphones) and if it tries to go after Apple and Samsung in this space, as Forbes mentions here: http://www.forbes.com/sites/kenrapoza/2013/02/01/lenovo-wants-a-piece-of-apple-samsung/

  8. Jennifer Baljko
    February 5, 2013

    FreeBird – guess we'll see in a couple years if Philips made the right bet. Maybe the lighting and healthcare markets will be stronger than we think.

  9. Jennifer Baljko
    February 5, 2013

    Prabhakar – The branding issue is a good point. I wonder, though, if consumers are getting confused or if for some things brands don't really matter much any more. Sure, if you're shopping for a phone or a PC  consumer loyalty may fall in one camp or another, but does it really matter which lighting fixtures or glucose monitor you choose? I'm not sure…

  10. Jennifer Baljko
    February 5, 2013

    elctrnx_lyf – agree – fighting spirit is good, but without constant investment in innovation the competitive fight will only get so far. 

     

  11. FLYINGSCOT
    February 5, 2013

    What is RIM's new name?  I agree companies must constantly evolve to survive.  I am not sure if Apple is evolving dramatically enough to maintain its cult following. I was amazed to hear Samsung makes more from its phones than the rest of its operations combined.  If you visit Korea you can appreciate how stupendous this is as Samsung literally make everything one could imagine.

  12. kilamna
    February 5, 2013

    The worse the management (Board and CEO etc) of a company the more frequent and drastic their reorganization efforts. The Japanese have made it routine: management is rolled over twice a year in various party of the business, as people are moved around and internal politics are sorted out. I am aware of more than a few cases where the roles were swapped when two senior oerational managers were at each others' throats because 'things werent being done just right'.

    The list of successful mergers-acquisitions is very short; IBM -Lenovo is a recent one that comes to mind. Compaq-DEC-Tandem-HP-Autonomy are a string of major-disaster. Mr Romeny and his ilk have established a chain process where they pull the wool over 'investors' eyes and make money for themselves, but leave a disaster in their wake. With the hollowing out of US businesses-manufacturing in particular, it is just a financial shell game now. And a VERY short-term view; make a killing and get out.  Dell is DONE.

    Blackberry appears to have arisen from the dead. Brand loyalty exists only for slow changing consumer goods, (soap, shampoo, cereal, etc), NOT so much in electronics. I have bought Gateway, IBM, Dell, HP, Apple, Lenovo, PCs .. NEVER the same brand twice. I have had VWs more than 3 times, and am about to get a 4th, but that is because of performance and utility; nothing to do with 'BRAND'. I had bought a Volvo years ago because of the BRAND image of quality-safety; I was SO DISAPPOINTED with quality that I now dont even consider it when I go looking for a new car.  I have hads American car brands, Chevy, Dodge, and do still 'look' at them because I would LIKE to buy American, but have yet to do so because of the price-quality-perfromance doesnt get close to the foreign brands, and because the 'American' cars are really no longer 'American'.

  13. kilamna
    February 5, 2013

    Samsung is to Korea what Mitsubishi was (is?) to Japan. Mitsubishi got its big break when the emperor needed someone to literally (financially) bail him out. But a servile adherence to western (specially US) business practices may have destroyed that great comapny. An organization MUST honor and live by the CULTURE it operates in: US companies can be a 'mutt' since there is no real 'culture' in the US, but Japanese and other Asian companies will have to live by their cultural values for several more decades.

  14. t.alex
    February 10, 2013

    Samsung is really trying out every possible thing. Medical devices is the trend now so it is not surprising Samsung is trying to enter too. But is it true it is doing this for its own self rather than maintaining loyal customers like Apple ?

  15. Daryl
    March 1, 2013

    The US does have a culture but that was lost to the last 2 generations.  Respect for individual property rights and self-reliance (and not dependent on the almighty federal government.)   The trend was broken during the FDR era and you see it today in a country that cannot understand personnel responsibility.   No …. we are not a country that is married to traditions that are present in the orient nor to the clans of Europe.  We WERE a society that understood that freedom from tyranny is the only way that the human spirit can achieve their ultimate goal (success or failure) but now we are influenced by the so called enlighten few in Washington DC and led by a man who never grew up in the environment understanding what really is the core of the US culture. 

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