“Samsung Electronics Co Ltd is bracing for its weakest smartphone profit growth this year since 2007 as arch rival Apple Inc challenges its domination in China’s $80 billion market,” Miyoung Kim reports for Reuters. “Samsung’s mobile devices business, which earns two thirds of the company’s profit, will come under pressure when Apple makes its phones available from Jan. 17 via China Mobile Ltd , through which Samsung has been selling smartphones for around seven years.”
Kim reports, “Apple is also widely expected to sell smartphones with larger screens come autumn when it traditionally announces products, neutralizing a selling point that Samsung has enjoyed since introducing its Galaxy Note in late 2011.”
MacDailyNews Take: Here, we’ll fix that for you:
“Apple is also widely expected to sell smartphones with larger screens come autumn when it traditionally announces products, neutralizing
apretty much the only selling point that Samsung has enjoyed since late 2011.”
Samsung is certainly not selling build quality, OS security, app quality, or anything else.
“‘Profit decline in mobiles will be inevitable, as the majority of growth will come from cheaper, low-margin phones, while competition at the high end will get only tougher with Apple’s iPhone deal in China,’ said Shinhan Investment analyst Kim Young-chan,” Kim reports. “Operating profit at Samsung’s mobile devices division is likely to grow by a low single digit or to shrink mildly in 2014, after increasing its size by eight times over the past five years, according to a Thomson Reuters’ Starmine SmartEstimate of 23 analysts, which gives greater weighting to the more accurate analysts. ‘Its business was already hit in the fourth quarter by Apple’s strong iPhone sales, and the impact will continue at least until the end of the first quarter,’ said Kim.”
“Samsung is the biggest smartphone vendor in China with sales reaching around 70 million units last year, or 20 percent of its total shipments, analysts estimate,” Kim reports. “But Apple’s China Mobile incursion and possible larger screen offerings could cut sales of Samsung’s latest Galaxy S and Note series by 3 percent this year, BNP Paribas estimates. The iPhone is widely perceived in China as a gold standard for high-end products, analysts say. ‘We think one of the key reasons Samsung has managed to take market share from Apple so far is its large-sized screen offerings,’ BNP analyst Peter Yu said in a note.”
Read more in the full article here.
MacDailyNews Take: As we wrote on Friday:
We understand fragmentation. We understand the issues of producing apps that work on devices with various screen sizes (intimately).
None of it matters because too much of the market wants an iPhone with a bigger screen. Developers will simply work harder for the premium customers found on the premium platform. Period.
This omission – not iMacs and Mac Pros that miss Christmas or anything else – is Tim Cook’s biggest mistake to date. Apple should have a bigger iPhone on the market by now, but since, for some inexplicable reason a company with more cash at their disposal than Intel Corp. is worth doesn’t, the sooner the better.
Die, Samsung, die.