Struggling Samsung forecast to see earnings drop for 2 straight years

“Samsung Electronics Co. is forecast to post a profit slide for the second consecutive year in 2015 as the company strives to keep grip amid a slump in handset sales,” Yonhap News reports.

“The South Korean tech [chaebol] is expected to log a combined 20.8 trillion won (US$1.91 billion) in net profit this year, down 6 percent from the 22.1 trillion won estimated for all of 2014, according to data compiled by market tracker FnGuide Inc., based on a median forecast from local brokerages,” Yonhap reports. “The 2014 estimate marks a 27.3 percent fall from a year earlier if the figures match. Samsung Electronics is due to release its final version of last year’s earnings later this month.”

“Samsung’s operating income is estimated to have dipped 32.2 percent on-year to 24.9 trillion won in 2014 and is predicted to further drop by around 6 percent this year,” Yonhap reports. “Its cumulative revenue for 2014 is estimated at 205.4 trillion won, down 10.15 percent on-year, which will represent the first annual drop in nine years, the data showed. Analysts cited sluggish sales of flagship Galaxy smartphone as a main reason for the dim outlook. Samsung Electronics has been losing share in the global handset market, squeezed by Chinese startups including now the world’s No. 3 Xiaomi Inc. that came with cheaper phones, and its arch rival Apple Inc., which pushed ahead with the iPhone 6 in the high-end market.”

Read more in the full article here.

MacDailyNews Take: The slavish copier’s comeuppance continues.

It’s best not to mess with karma. – Steve Jobs

Xiaomi, you’re next.

[Thanks to MacDailyNews Reader “M J Miller” for the heads up.]


    1. Yes. There are about 1,100 won per dollar. So 20.8 trillion won is about 19.1 billion US dollars.

      Hey, not too shabby for intellectual property (including design) thieves.

      Thank you Judge Judy Koh for letting them get away with it !!!

  1. Xiaomi earned $56 million in net profit in 2013, on sales of $4.3 billion. … contradicts an earlier report in The Wall Street Journal which cited documents showing Xiaomi had earned $566 million last year.

  2. Just as in the Windows PC market it’s difficult to make a profit selling a mostly generic product to a demographic mostly interested in low-cost devices.

    In order to successfully compete you need to be able to live on razor thin profit margins and if you aspire to produce high-end, profit generating models you will need to find ways of having these products distinguish themselves beyond obvious marketing gimmicks like the Samsung S5’s embarrassingly bad fingerprint scanner.

    Samsung is competing in a marketplace with hundreds of OEMs using the same processors and operating system and mostly produced in a country known for cheap labor and an utter indifference to theft of IP.

    Samsung, known for its reliance on IP theft and lack of any reputation for innovation, has been headed for an inevitable downhill slide ever since Chinese companies began producing android phones on a large-scale.

  3. Shamstung had to know their day of reckoning was coming, I reckon. Funny how few anal-cysts could understand their impending plight and less than perfect nor controlled ecosystem. It’s all seems abundantly clear now that Apple’s vertical model is far and away superior. It did take time to show the Seoul and Mountain View Emperors have no clothes like the launching of a copied rocket that eventually sputters out (due to less than premium fuel). Their decline at this point is inexorably inevitable.

  4. While it’s always nice to see the thieving Scumsung’s profits fall, $20 billion is still a nice bit of change. Don’t think we can call them ‘struggling’ or ‘beleaguered’ yet, much as we’d like to. They are a conglomerate, so even if the mobile division loses money, other divisions can make up for it.

    Of course, for us, it’s enough to have their mobile division lose money, isn’t it? 😉

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