Samsung Leaves Fibre Optics and Focuses on Smartphones

Samsung exits the fibre optics market in Asia as part of the company’s initiative to focus on core businesses such as the smartphone market to increase profits.

Samsung sold its U.S. fibre optics operations to glass maker Corning Inc. This is another move by Samsung to exit markets which do not form a part of its core business and focus on key areas. Samsung is also stopping operations of its light emitting diode lighting business outside of South Korea. The company is facing its lowest profit margin in three years after fierce competition from competitors such as Apple Inc. and the Chinese Xiaomi Technology Company. The electronics company plans to strengthen their operations by focusing on key business areas in order to prevent an ongoing fall in profits. Samsung’s share of the international smartphone market has also fallen over the last consecutive three quarters but the company remains the world’s top smartphone maker.

The Seoul-based mobile manufacturer also produces consumer electronics, electronic components, medical equipment, semiconductors, ships, precision equipment, chemicals and apparel. Samsung earned over US$327 billion in 2013 and has an estimated value of over US$100 billion.

A Corning spokesperson said that the acquisition will strengthen the company’s fibre optics business in Asian. Corning supplies Samsung and Apple with glass for their smartphones. The glass manufacturer was founded in 1851 and generates around US$8 billion annually. The company also sells ceramics and glass for scientific and industrial applications, and operates in five major business sectors: telecommunications, display technologies, life sciences, environmental technologies and speciality materials. Corning also developed a range of consumer Pyrex cookware in the late 90s, under the brands CorningWare and Corelle which was sold by World Kitchen.

Although it looks unlikely that Samsung will lose out significantly, they are taking the necessary precautions so as not to follow in the footsteps of companies which did not see the warning signs early, and failed to prevent ongoing declines in revenue. Nokia, which was once the top mobile manufacturer globally has experienced a downfall in recent years which serves a warning to any mobile manufacturer to not get too excited and comfortable when they reach the top spot.