Convicted patent infringer Samsung braces for weakest year of smartphone growth

“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 a pretty 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.


  1. I understand MdN’s take, but it’s also worth remembering Henry Ford’s warning about selling automobiles to the general public: if I had asked my customers what they wanted, they would have said a faster horse.

  2. The iPhone doesn’t need a bigger screen. It’s big enough already. If a bigger screen is wanted, get the iPad Mini. Seriously, after seeing people using the android phones it reminds me of the early 80’s when people were running around with the huge TI-30 calculators crammed into their pockets. Bigger doesn’t mean better.

    1. Total fail. Samsung has no idea what to do with the thing – there’s no reason for it other than “bigger”. When they seamlessly integrate it with a desktop computer (never happen, they don’t own the desktop), then we can talk….

    2. Rather than researching and engineering quality and function, Samsung attains ‘OK’ status then scatter-shots variations at the public to see what sells.

      I can see larger sizes having niche uses. The problem is that it’s still Samsung mediocrity inside.

    3. LOl. Samsung is now busy copying products that Apple is just rumored to release soon. Tim could have some fun with this by spreading rumors of all sorts of odd products. Samsung would exhaust themselves trying to be first with everything.

  3. Saw a woman take a honking great phablet out of her handbag to take a photo. Where the heck am I going to put something like that – when biking, boarding, driving, sitting in a business meeting, walking along the street, going to the pub, having a meal?

    For me, the whole point of mobility is … uhhh … mobility. If I want to watch a movie, my mobile computer (aka iPhone) can do that. Yeh, it’s small, but I don’t want to sacrifice mobility to have a bigger movie screen.

    Other companies made 19″ and 20″ laptops. Apple never did, as far as I know. My 5S is about as big as I want a mobile phone-computer to be.

    And what are the stats on phablets anyway. Not long ago, they really weren’t selling very well. Samsung was selling far more small phones that phablets.

  4. Oh pulhease mdn. If big phones were wanted by a large part of the market, why has every big phone maker seen negative growth this quarter. Where has that big market gone?

    Big phones have always been a niche, and now that niche has reached saturation. Hence the slowdown in sales. It just mirrors what happens in tech. Portable things get smaller, if you carry something around you want lighter and smaller. Particularly when you need to use it in one hand.

    It’s not coincidental that the only phone company that has seen sales growth is the one without bigass phones.

    Number one reason people say they want a bigger phone is because it’s easier to read. Apple solved that problem by making it possible to increase the font size in the ui.

    Even Samsung is aware of this. They modified the size of s4 in a print as so it didn’t look enormous in the female models hand. Even then it didn’t help the crash in sales. If people were buying more bigass phones last quarter samsungs profits wouldn’t be tanking.

    The iPhone is the worlds best selling phone by a large margin, lots more people want that form factor than a big ass phone.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.