Beleaguered Samsung reports 30 percent decline in operating profit
“Samsung’s financial results continued to take a hit in the first quarter as the company battled tough competition in the smartphone market,” Shara Tibken reports for CNET. “Sales dropped 12 percent from the previous year while Samsung’s operating profit fell 30 percent. A 30 percent decline in operating profit isn’t minor, but it’s a smaller drop than what Samsung has posted in previous quarters — 36 percent in the fourth quarter and 60 percent in the third quarter. Samsung’s IT and mobile business recorded a 57 percent year-over-year drop in operating profits, compared with a 64 percent decline in the fourth quarter and a 74 percent tumble in the third.”
“Samsung has been struggling over the past couple years as consumers opt for devices from its rivals, such as Apple,” Tibken reports. “Samsung’s financial results, while improving, are worlds apart from rival Apple. The iPhone and iPad maker on Monday posted record revenue and iPhone and Mac sales for its fiscal second quarter. The company has been benefiting from soaring demand for its newest iPhones, particularly in emerging markets such as China, and it sold 61.2 million smartphones during the period that ended March 28. Overall, Apple’s profit jumped 33 percent to $13.6 billion, and its revenue climbed 27 percent to $58 billion.”
“Samsung, by comparison, has seen its sales wane, and the March period represented the sixth time in a row that the company’s quarterly operating profit has fallen from the previous year. Samsung has been struggling to compete against Apple in the high-end phone market and against newcomers such as Xiaomi at the low end,” Tibken reports. “Apple in particular has become a bigger threat with its larger-screen devices, the 4.7-inch iPhone 6 and the 5.5-inch iPhone 6 Plus. Simply wanting a bigger display is no longer a reason to buy Samsung’s devices, and its smartphones can’t reach the low prices of those from Chinese and Indian vendors.
“The iPhone 6’s popularity helped Apple pass Samsung to become the world’s biggest smartphone maker in the fourth quarter, according to tech research firm Gartner,” Tibken reports. “The firm believes Apple took home a 20.4 percent share of worldwide smartphone sales, up from 17.8 percent during the same quarter in 2013. Over the same period, Samsung’s share of the smartphone market, on sales of 73 million units, plummeted to 19.9 percent from 29.5 percent, Gartner said.”
MacDailyNews Take: Hello, Karma, so nice to see you again! Don’t hold back now, ya hear?!
It’s best not to mess with karma. – Steve Jobs
An iPhone with a larger screen option will hurt Samsung immeasurably more than myriad, unending traipses through the legal morass. – MacDailyNews Take, May 2, 2014
