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.”

Read more in the full article here.

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

Apple grabbed 93% of the mobile industry’s profits in fourth quarter 2014.

Thermonuclear
Thermonuclear.

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33 Comments

  1. It’s beginning to feel similar to when MSFT began to drop out of the conversation vs Apple, isn’t it?

    It seems so long ago, but remember when Windows vs OS X was a thing? And then after a time it was no longer a real fight anymore. They’ll continue to make buckets of money from a declining market, though.

    MSFT fought (and continues to fight) lesser wars — tablets, phones — but they don’t have much presence in the public discussion.

    And now it seems Samsung and by extension Google are beginning to fade in similar fashion.

    The current fight is transitioning to the watch, of course. I don’t know that there is a competitor with the stature that MSFT or Samsung had in those other fights. Probably it’s more like the lesser industries that atrophied as cell phones took over — the pocket cameras, mapping devices, and so on.

  2. Also on CNET and others, this deceptive positive take:

    Samsung Electronics has recaptured its title as the world’s top smartphone maker, according to new research released Tuesday.

    The South Korean electronics giant shipped 83.2 million smartphones worldwide during the first quarter of 2015, capturing 24 percent of the smartphone market, according to market researcher Strategy Analytics. While that’s a decrease from its 31 percent marketshare a year ago, it still bests the 17.7 percent marketshare Apple recorded with 61.2 million units shipped during the quarter. The iPhone maker’s market share expanded on the 15.3 percent it commanded a year ago but shrank from the 19.6 percent it captured in the fourth quarter of 2014, according to Strategy Analytics.

    1. ScamScum CEO: We have to increase our shipments of phone, but no one is buying them, what can we do?

      ScamScum Marketing VP: I say we fill phone boxes with rocks. No manufacturing cost with rocks. Ship boxes to warehouses, sine no one buys our phones, no one will notice. All the stupid pundits equate units shipped with units sold. We increase our shipments until we recapture Marketshare.

      ScamScum CEO. Brilliant! Do it!

      🖖😀⌚️

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