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Samsung loses some grip: fourth quarter profits down 27%

Posted: , by Maxwell R.

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Samsung loses some grip: fourth quarter profits down 27%
Samsung’s mobile division has seen a rather dramatic decrease in profitability over the past year, as the company announced its fiscal fourth-quarter earnings. Overall, the conglomerate has seen a third straight quarterly decline in profits, with its mobile division operating profits declining 64% during the past 9 months. Profit for the quarter was $4.9 billion.

What has been seen as a nearly unstoppable force in marketing along with massive product placement and production, has seen fierce competition.  The competition has resulted in declining visibility in China, but most notably Apple, whose new iPhones are proving a big hit, has made the biggest inroads, bestowing Cupertino with history-making profits on record sales of the pair of flagships.

It has not just been Apple eating Samsung’s lunch, Xiaomi, Lenovo, and Huawei have been circling in the water as well, and that has caused the Korean concern’s standing in China to falter, losing a significant amount of market share in China, down to 9% from 17% in a year.

Despite the carnage, Samsung’s mobile unit still eked out a 7.5% profit margin on sales of 95 million handsets, of which, about 75-80% were smartphones. Those are respectable numbers for a company that size, but it is probably safe to say that the days of 20% profit margins are long gone.

What cannot be ignored is that Samsung is likely pinning a new strategy in making a bigger market for its mobile chip division, a unit that has not been making as much money as the company would like. It is entirely possible that Samsung has been pondering the writing on the wall as it relates to the mobile device environment, and has been working on a shift in gears to pick up the slack.

The numbers were all in line with estimates and guidance from the company and industry analysts, but with the expected big push, one has to wonder if the hub-bub over the Qualcomm Snapdragon 810 CPU is really about heat.

source: The Wall Street Journal

31 Comments
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posted on 28 Jan 2015, 22:52 5

1. You_Dont_Say (Posts: 234; Member since: 26 Jan 2015)


Apple doomed? No. They just posted the record for profit in a quarter.

By fandroid logic, SAMSUNG IS DOOMED.

posted on 28 Jan 2015, 22:55 3

2. Busyboy (Posts: 633; Member since: 07 Jan 2015)


Apple has had it rough the last couple years, look at them now. I have the same vision for Samsung.

posted on 28 Jan 2015, 22:58 9

3. saucexD (banned) (Posts: 62; Member since: 20 Jan 2015)


Apple rough the past few years? Lmfaooo what planet do you live on?

posted on 28 Jan 2015, 23:02 4

6. Busyboy (Posts: 633; Member since: 07 Jan 2015)


Well, for starters, if you knew a thing or two about stocks, you would understand. I remember couple years ago, Apple's stock was at 600$, then dropped all the way to $300 or $400. Of course it wasn't horrible per say, just not good to Apple's usual

posted on 28 Jan 2015, 23:05 7

7. You_Dont_Say (Posts: 234; Member since: 26 Jan 2015)


Are you referring to the term called a stock split?

For someone who claims to know a lot about stocks, you seem quite lost.

posted on 28 Jan 2015, 23:10 3

9. Busyboy (Posts: 633; Member since: 07 Jan 2015)


Haha no I'm not referring to that buddy. Apples stock split happened in 2014, bringing it down to $100. Going from 600 to 400 happened year or two ago.

posted on 28 Jan 2015, 23:31 5

11. You_Dont_Say (Posts: 234; Member since: 26 Jan 2015)


I thought you were referring to the 7 to 1 stock split. But now I see you are talking about Apple's stock drop since 2012.

Apple hasn't had a rough couple of years. Stock performance does not necessarily directly affect Company performance. During the time, idiots thought that Apple would not be able to keep up with emerging android tech.

Not once in the past 5 years has Apple struggled as a company.

posted on 30 Jan 2015, 18:34

32. JunitoNH (Posts: 1931; Member since: 15 Feb 2012)


Don't waste your breath, some are not investor, and don't understand. Disney is notorious for splitting their stock.

posted on 28 Jan 2015, 23:01 3

5. You_Dont_Say (Posts: 234; Member since: 26 Jan 2015)


It's actually a fact that Apple did not have it rough the past couple years.

posted on 28 Jan 2015, 23:50 1

15. HugoBarraCyanogenmod (Posts: 1345; Member since: 06 Jul 2014)


I failed to see Apple has hard time, as their margin same high from couples years, Apple suck on people's money.

Samsung future will become like Nokia instead if they don't fix their problems now

posted on 29 Jan 2015, 01:02 1

17. Ashoaib (Posts: 3229; Member since: 15 Nov 2013)


There are plenty of beautiful and nicely specs phones in the market from china between 100$-200$ price range. Huawei, lenovo, hisense etc. The looks of these phone are pretty premium unlike samsung's core, duos etc. Samsung's phones lack luster and offer less specs in asking price. I have seen, people are now less interested in samsung. Only apple has an image to ask more for less specs, none other.

posted on 29 Jan 2015, 03:16 1

22. TylerGrunter (Posts: 1543; Member since: 16 Feb 2012)


I thought you were trying people not to hate a brand, check yor second post here:
http://www.phonearena.com/news/Strategy-Analytics-Apple-and-Samsung-tie-for-global-smartphone-supremacy-in-Q4_id65328

But you hate Samsung and insult them, quite the hypocrite you are...

posted on 29 Jan 2015, 07:43 1

27. AfterShock (Posts: 3698; Member since: 02 Nov 2012)


+1
It seemed a little odd in his saying thay he wants no more hate,
an then he prods everyone again.

posted on 28 Jan 2015, 22:58 2

4. greenelektron (Posts: 537; Member since: 10 Sep 2014)


When Sammy first had a dip in their profits last year or in 2013, their bosses returned some of their income to the company because of shame. I wonder if they still have something to return.

If Sammy just stay humble and not seek for more profit by overpricing their smartphones, I think that would be great for everyone. Their phones are great but are really very overpriced.

posted on 28 Jan 2015, 23:09 1

8. nctx77 (Posts: 2360; Member since: 03 Sep 2013)


Basically what this article is saying is that Samsung knows it really doesn't have a way to distinguish itself anymore. The general public knows that there are other options. Like the article said, it's not just Apple. The entire Android army is circling the waters. I knew this was coming. You can't build your ecosystem around a platform that everybody else has. This is where Apple wins. It's to easy for another manufacturer to have the same screen size, chipset and App Store.

posted on 28 Jan 2015, 23:12 2

10. Busyboy (Posts: 633; Member since: 07 Jan 2015)


At least if you get an Android you won't have the same device as everyone else. Android devices have diversity, with Apple you'd be the same as everyone else.

posted on 29 Jan 2015, 04:26

25. cnour (Posts: 1334; Member since: 11 Sep 2014)


This proves how Android users are smart. Stupid.....

posted on 28 Jan 2015, 23:38

12. Mube007 (Posts: 249; Member since: 24 Sep 2013)


well weather u guys are agree with me or not but the problem was wrost designing since galaxy s4..samsung have only one strategy different price same desgning plus too many unnecessary phones launching every weekend....

posted on 28 Jan 2015, 23:38

13. Mube007 (Posts: 249; Member since: 24 Sep 2013)


well weather u guys are agree with me or not but the problem was wrost designing since galaxy s4..samsung have only one strategy different price same desgning plus too many unnecessary phones launching every weekend....

posted on 29 Jan 2015, 00:23 1

16. itsdeepak4u2000 (Posts: 3718; Member since: 03 Nov 2012)


After S3 their phones became the same and lots of crap from lower to mid range.

posted on 29 Jan 2015, 01:05 1

18. mrochester (Posts: 626; Member since: 17 Aug 2014)


Absolutely fantastic news. This could not be happening to a more deserving company.

posted on 29 Jan 2015, 01:22 1

19. dsmiths (Posts: 5; Member since: 29 Jan 2015)


Samsung is doomed. China made phones are dominating. Now Apple must be damn happy they make their own software.

posted on 29 Jan 2015, 02:23

20. livyatan (Posts: 867; Member since: 19 Jun 2013)


This should mean they sold roughly the same amount of smartphones as Apple.

And still making more profit out of smartphone business than all other Android manufacturers combined.

Anyway, Samsung won't go anywhere, it is just settling into its realistic position on the market as the biggest Android vendor but not nearly as dominant as before. The profit margins per phone were simply unrealistic.
And Apple too will meet the same truth sooner or later.
Apple is now reaping the benefits of their years long build up to launching a larger screen iphones, but that too will come to an end soon and things are going to settle down for good.

posted on 29 Jan 2015, 03:53

24. Cyberchum (Posts: 715; Member since: 24 Oct 2012)


Apple has a very loyal fan base, you can say same about Samsung so it'll really be a long time before apple plummets if they're going to.

posted on 29 Jan 2015, 02:52 1

21. willytbk (Posts: 241; Member since: 15 Aug 2012)


OUCH !

posted on 29 Jan 2015, 07:11

26. GeorgeDao123 (Posts: 431; Member since: 20 Aug 2013)


2015 will be another year of loss for Samsung if it still continues launching too many models as it did in 2014...

posted on 29 Jan 2015, 09:07

28. LiquidGalaxy (Posts: 332; Member since: 03 Jul 2013)


Never mind that, wheres the Apple Watch :P

posted on 29 Jan 2015, 10:21

29. mawhob2222 (Posts: 219; Member since: 22 Mar 2014)


I hope more

posted on 29 Jan 2015, 15:52

30. Napalm_3nema (Posts: 2236; Member since: 14 Jun 2013)


The Apple term for Samsung's Q4: "Most of October."

posted on 30 Jan 2015, 11:59

31. TechieXP1969 (Posts: 13806; Member since: 25 Sep 2013)


The Apple trolls are out in full force. All I see is Apple comments in a Samsung article. Don't you guys have your own articles?

Apple sold 74M phones last quarter, go to their article and talk about it while we talk about how Samsung sold nearly 100M phones in a single quarter.

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