By Se Young Lee
SEOUL (Reuters) - Samsung Electronics defied speculation it would drop the head of its underperforming mobile division, as the Samsung Group's heir apparent opted to keep the man his ailing father appointed while the patriarch's future is uncertain.
Staff at Samsung have been waiting nervously for the annual reshuffle after a weak smartphone performance and the worst earnings in three years, with many fearing for their jobs, but embattled co-chief executive J.K. Shin now knows he will continue to head the Electronics unit's mobile division despite sagging smartphone sales.
Semiconductor business chief Kwon Oh-hyun and consumer electronics head Yoon Boo-keun also kept their jobs.
Analysts said Jay Y. Lee, likely successor and only son of group patriarch Lee Kun-hee, opted to keep his father's key lieutenants in place to ensure stability and consolidate his own position.
"With Samsung undergoing major changes in the midst of the succession process, like selling affiliates and listing units, it would have been too unsettling to change leadership," said Chung Sun-sup, head of local research firm Chaebul.com.
"And without a signal that Chairman Lee Kun-hee has stepped back for good, it might have been too much for Vice Chairman Jay Y. Lee to change the people his father put in position."
Park Ju-gun, head of corporate watchdog CEO Score, said Lee junior likely needs more time to shore up his position in South Korea's largest conglomerate with his father still in hospital after a heart attack in May.
"It was too soon for him to take a big risk at this point," Park said.
Samsung Group Senior Vice President Lee June reminded reporters that Shin was "a major contributor in Samsung Electronics' emergence as the top global player in the handsets business" and would be given an opportunity to turn the business around.
Squeezed by Chinese rivals like Xiaomi Technology Co Ltd at the low end and Apple Inc's iPhones at the top, Samsung Electronics' share of the smartphone market has shrunk year-on-year for the last three quarters, leading to speculation Shin's days were numbered.
Samsung Electronics insiders said employees' focus was now on any follow-up management appointments and reorganization plans due for the firm later this week.
(Additional reporting by Joyce Lee; Editing by Stephen Coates and Will Waterman)