Samsung stops reporting phone sales data as profit slides 18 percent

“Samsung Electronics Co. on Friday said it would stop disclosing sales figures and forecasts for its mobile phones and tablet computers, a step it attributed to business risks and that analysts said was probably due to its continuing legal battle with Apple Inc.,” Evan Ramstad reports for The Wall Street Journal.

“When the company released second-quarter results Friday, the cellphone data were missing. And in a conference call with analysts, executives announced a “new information policy” that would reveal less data about cellphones and tablet computers,” Ramstad reports. “‘As competition intensifies, there are increased risks that the information we provide may adversely affect our own businesses,’ Robert Yi, Samsung’s chief of investor relations, said on the call. He declined a request for further explanation.”

Ramstad reports, “Apple sued Samsung in April, alleging that Samsung copied portions of the design and packaging of Apple’s iPhone and iPad when it designed similar products. Samsung countersued. However, it lost a preliminary ruling in the original case when a judge cited comments by a Samsung executive who said the company redesigned its recently released Galaxy Tab 10 tablet after seeing Apple’s iPad 2.”

Read more in the full article here.

Kelly Olsen reports for The Associated Press, “Samsung’s net profit slid 18 percent in the second quarter as weakness in semiconductors and liquid crystal displays countered the electronics giant’s growing strength in smartphones.”

“Samsung, the world’s biggest manufacturer of memory chips, LCDs and flat screen televisions, earned 3.51 trillion won ($3.33 billion) in the three months ended June 30, it said Friday in a regulatory filing. Samsung earned 4.28 trillion won the same period last year,” Olsen reports. “et profit slumped 30 percent in the first quarter amid declines in memory chip prices and reduced profitability in LCDs and TVs.”

Olsen reports, “The bright spot in the second quarter continued to be mobile phones. Revenues in the company’s mobile communications business, which includes phones, rose 45 percent from the year before.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Edward Weber” for the heads up.]

19 Comments

  1. Normally companies don’t report actual sales numbers to hide loses. If Samsung is not reporting sales numbers for a given department they are trying to hide weak profit achieved by that department behind other more profitable departments.

    1. Samsung is NOT giving their phones away. The carriers are, in exchange for long contracts, in which the have hidden the subsidized price of the phone. The carriers still paid Samsung, no one makes phones for free.

      Carriers giving phones away shows how little they value the phones.

      1. Don’t think Samsung doesn’t have anything to do with it. By accepting a lower subsidized price it makes it a whole lot easier for carriers to swallow the pill of giving phones away.

        1. No, it doesn’t. In fact, Samsung rarely ever markets their own phones by themselves. Because of the time-honoured practice of carriers dictating device names, features (or lack thereof), software functionality and everything else, it is the carriers who advertise handsets in America; not handset makers (with the obvious exception, of course, being the Apple).

          BOGO (By-one-get-one free) offers are carrier promotions and Samsung does NOT participate (by lowering wholesale price).

          As for the subsidy, analysts speculate that the iPhone has the highest one, and other smartphone makers command anywhere between $250 and $400 (iPhone gets at least $450 from the carrier).

        2. Carriers can easily afford such BOGO promotions. To make nominal profit, carriers need to charge some $40 (retail) for a basic smartphone plan (limited voice minutes, limited data, no text, such as AT&T’s $55 iPhone plan). Anything they get above that (i.e. $15 in case of the $55 AT&T iPhone plan) subsidises the phone. Within two years of that initial contract, the subsidy is recovered. The beauty of the plan starts after the contract expires, and customer continues to pay the same plan rate (which includes the subsidy portion). The $15 per month or so is pure gift to the carrier.

          How many people buy a new subsidised phone as soon as they become eligible for one? Probably 15-15% of total customer base.

          The whole post-paid subsidised deal is the single biggest money racket US carriers perpetrate on majority of their customers.

  2. Samsung’s net profit slid 18 percent in the second quarter as weakness in semiconductors and liquid crystal displays

    A trend that will continue as Apple takes their semiconductor and LCD purchases else where.

    1. I’ve got to wonder about the executive decision that pushed for a direct challenge from one Samsung division against another Samsung division’s biggest customer.

      Was the low margin handset and tablet market so enticing that they’d put at risk the chip and display business with their biggest customer? Maybe the chip and display business lines are low margin, too, but $8B business is $8B business.

      1. I wonder if Apple would be able to leverage that chip & panel business to blackmail Samsung: “Change your phones or we go to LG!”.

        I’m curious whether the reason they hadn’t done that (blackmailed) is lack of proper leverage there, or just for ethical reasons (which wouldn’t surprise me all that much, considering the personalities at the top of Apple).

        1. Those business requirements wouldn’t be considered ‘blackmail’, which is illegal. Asking a company not to continue in its direct competition with you is merely good business, and completely legal.

  3. Samsung actually said that they sold 5 million Galaxy S II smartphones.

    So they did not stop reporting all of data. They earn the money by selling smartphones that infringe Apple’s patents.

    1. @derss

      Did you read the article. Going forward Samsung will not report phone sales data. So yeah, they reported it this quarter but not next quarter.

      5 million? That’s it?

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