“Samsung Electronics Co., the world’s biggest maker of smartphones, posted its second straight decline in quarterly profit as stalling demand lowers prices for Galaxy devices and components,” Jungah Lee reports for Bloomberg. “Operating profit fell to 8.4 trillion won ($8 billion) in the three months ended March from 8.8 trillion won a year earlier, the Suwon, South Korea-based company said in a statement today. The result compares with the 8.3 trillion-won average of 29 analyst estimates compiled by Bloomberg.”
“Sales of high-end products are slowing because of market saturation and the debuts of new Apple Inc iPhones, curbing earnings as the company focuses more on lower-priced devices,” Lee reports. “Samsung unveiled the 5.1-inch S5 smartphone with a fingerprint reader in February and plans to make it available outside South Korea starting April 11, as the company seeks to fight back against the iPhone 5s and 5c, released in September.”
“Samsung will release its next large-screen Note device in the second half of this year, Lee Young Hee, executive vice president of the mobile business, said in a Jan. 6 interview. The newest Note may use a three-sided display so messages can be read from an angle,” Lee reports. “The company’s grip on the large-screen market it pioneered with products such as the 5.7-inch Galaxy Note 3 faces new threats from other producers. Apple is developing new iPhone designs including bigger screens, a person familiar with the plans said last year. Such a move may hurt Samsung’s earnings and market share, according to Nomura.”
Read more in the full article here.
MacDailyNews Take: The more pain, the better.
Going dooooown!
Oh, hey, according to another note this morning on MDN, Apple is in trouble, Samsung is gaining…
WTF, what is up?
What? Didn’t the years of “Buy 1 Get 1 FREE” work for RIMM? When I saw those adds start for Samsung, I knew their days are numbered too!
Exactly…
Outside of the the camera… I think the HTC One (M8) is a better phone… not to mention the Sony phones(but their interface seems lagged)….
The ball will drop when Apple finally releases it’s ‘wider’ screened phone(s).
The media focuses so much on marketshare… BUT if you are the market leader, what market is there for you to grow into… Apple sales of iPhones grow EVERY YEAR… and add to that PROFITS are stable… although not growing like they did before Samsung became the default android competitor.
“Sales of high-end products are slowing because of market saturation and the debuts of new Apple Inc iPhones”
They debuted in September – 2 quarters ago. If Sammy can’t compete against a 6 month old iPhone, they certainly do have problems.
they better focus on lower end devices because when the larger screen iPhones come out Samsung will lose their only perceived advantage over APPL hardware. funny no mention of a 64-bit chip. guess that marketing gimmick is too hard to replicate ehh?
Samsung needs Apple to innovate for them fast!
Apple did six months ago, but Samsung are still 32 bits behind and will remain so for some time.
Follow faster Samsung! Faster! Faster!
This will undoubtedly be seen as a positive for Same-oh as the decline was less than the average analyst estimate.
Isn’t Samsung biggest market share ?
Notice that Samsung isn’t making anywhere even close to Apple’s margins, nor does it have the customer loyalty.
First time buyers are getting low cost shiny Samsung.
and then they get pissed and swear no more shamesuck!
Samsung won’t be able to continue spending such immense sums on marketing now that their profit’s are in decline. I wonder how much their sales will hold up when the marketing spend is reduced ?
Samsung will increasingly be recognised as a tarnished brand. They make no friends from the way that they do business and can’t keep buying paid-for friends indefinitely.
Yes they are on very porous ground. They have slow margins so need to sell bucket loads yet they can only do that if they market the hell out of it costing fortunes. Wont take much for the whole edifice to sink if they don’t keep to a very narrow trail. If another Asian manufacturer can gain local cache and one will eventually Samsung will seriously struggle. I can see thousands of their trolls crying at the very thought.
Gee…can’t wait for the new Note. I have been anxiously awaiting a phone that I can read from an angle.:)
Wow..that’s all they got?
I foresee a privacy concern being raised about that
“Profit at Samsung’s chip unit, which supplies its own handsets and also those of rivals such as Apple, nearly doubled to 2 trillion won on sales of 9.8 trillion won, according to the Bloomberg News survey of analyst estimates.” – good for Apple?
I was surprised yesterday when I heard on the radio an advertisement stating that Samsung and Verison were jointly promoting a Buy One Get One Free offer for the Samsung’s “flagship” Galaxy S5. A new, “flagship” phone resorting to a BOGO offer two months after it is announced and less than a week after it is available in quantity is an extreme indicator that the Galaxy S5 really is not selling. I listened to the advertisement very closely because I was certain the BOGO offer must have been for an older phone. It absolutely wast for the S5.
Is it because of the fingerprint reader implementation is extremely poor?
Is it because not as many people want “phablets” as many would have us believe?
Is it because the Android OS is not all that it’s cracked up to be?
Or something else entirely, or a combination of all of them?
Their marketing budget is taking a huge chunk out of their profits. $16B per year or $4B per quarter. Marketing costs are 50% of their profit for the quarter. That’s massive.
Are you telling me giving a two for one deal doesn’t increase profits?
I’m shocked.
Hey, Samsung is just copying Amazon.
Low/No profit with MAX volume …
I keep reading that Apple needs to build a larger phone, however the large Android phones are not selling as much as people claim. I believe a phone should fit in a pocket on a pair of jeans, and the market is proving me right. The iPhone 5c is outselling the S5. As for phablets people forget the reason for them in the first place. When the iPad came out Android did not have an OS for tablets. For some reason they needed a cell connection. To jump in the market Samsung, and others, created big phones that pretended to be iPads. Samsung’s S pen gave them the advantage over other Android OEMs. The idea that phablets are so popular is BS. It was the only choice for people who did not live in a country that did not sell Apple products.
Well as MDN likes to repeat (and as Apples own charts indicated yesterday ) evidence suggests that a large chunk of people do want phones of 5 to 5.5 inches and it is the largest growing sector so many do not agree with you.
…however the large Android phones are not selling as much as people claim.
The phabulous phablets have been hyped way beyond the interest and sales potential of their niche market. Many of us have been pointing that out. There is a niche. But the majority of articles about them have amounted to vacuous August Effect In Winter filler.
Essentially, what you’re saying is that big screen phones represent about 10% of sales, even though arguments touting them represent 90% of published articles.
Seems like histrionics translated into clickbait journalism, more than actual information.
Just more proof that lying about your products and bad mouth advertising against Apple only helps Apple even more.
Thanks Samsung, keep up the good work. Looking forward to your next dismal quarterly report.