Samsung Profits Fall 27% As Apple Strips Share Away From Korean Giant
Apple appear to have stripped share away from Samsung in China where Apple has recently had a lot of success with their iPhone 6.
Net profit for the quarter ended Dec. 31 dropped to 5.35 trillion won ($4.9 billion) from 7.3 trillion won a year earlier Samsung said earlier today.
The decline, however, was smaller than the 49% on-year drop in the third quarter as Samsung’s chip business reported strong sales.
Analysts forecast a modest recovery in the company’s bottom-line this year on the back of demand for its memory chips and processors. Samsung is also expected to launch a new flagship smartphone in March.
Operating profit fell 36% to 5.3 trillion won on an 11% drop in revenue at 52.7 trillion won, Samsung said. The figures were in line with the company’s previous guidance.
Strategy Analytics estimates Samsung shipped 74 million to 77 million smartphones in the fourth quarter, down from an estimate of 86 million units a year earlier.
According to the guidance this is “as a result of declines in the mobile business due to intensified smartphone competition, which also had an adverse effect on the performance of the OLED and S.LSI businesses, and weak seasonal demand for the CE business, including TVs.”
The issue for Samsung is how it’ll convince people to spend their money on their current model smartphones including the Galaxy Alpha instead of some seriously compelling competition. In Australia the Galaxy Alpha has a recommended retail price of $599.
The Alpha has been pitched directly up against the iPhone 6 it also costs as much as the Xperia Z3, which has a better camera, display, and battery while also being waterproof.
Samsung’s continuing answer to falling revenue and profits is to double-down on the existing hardware line-up through “new material and innovative design” and “strong competitive pricing” at the lower half of the portfolio.
More to follow.