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Samsung: smartphone growth to slow in Q3

Posted: , by Alan F.

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Samsung: smartphone growth to slow in Q3
Competition is expected to reduce Samsung's smartphone growth in the third quarter, acording to Kim Hyun-joon, V.P. of Samsung's mobile business. The Korean manufacturer also told investors to expect a lower average selling price for the smartphones it sells in the current quarter as low to mid-range models become a larger part of Samsung's portfolio.

While the Korean based tech giant did report a 50% increase in second quarter net income to a record 7.77 trillion won ($7 billion), smartphone margins were down, mostly due to higher expenses associated with increased marketing of the Android flagship Samsung Galaxy S4.

The tech titan's mobile communications sector, which includes handsets and other mobile communication equipment, accounted for 66% of total operating profit. The sector's operating profit rose 54% year-over-year, but showed a slight decline in growth sequentially with a 52% increase from Q1. Margins in the mobile communications group fell to 17.7% from 19.8% in the first quarter.

Despite weaker sales of the Samsung Galaxy S4, Sammy is locked into some promotional decisions, like the $20 million deal it signed with Jay-Z. The company recently purchased 1 million digital copies of the rapper's new "Magna Carta Holy Grail" album and gave them away to 1 million Galaxy users three days before the album dropped.  Investors aren't blind to the situation. Since the Samsung Galaxy S4 launched in April, Samsung's shares have dropped 12.8% wiping out $25 billion of the company's value.

There is still the Samsung Galaxy Note III for Samsung investors and fans to look forward to. The phablet is expected to have a 5.7 inchscreen and possibly include the new Samsung Exynos 5420 processor and 3GB of RAM. But just like the Samsung Galaxy S4 ran into increased competition this year from models like the HTC One and the Sony Xperia Z, the Galaxy Note III will have to battle the 6.4 inch Sony Xperia Z Ultra and the HTC One Max. The Sony model has already been introduced and will launch in Taiwan at the end of this month.

"The smartphone market will likely continue to grow in the third quarter, but there's a chance that the pace of growth may slow as competition intensifies with new model releases."-Kim Hyun-joon, vice president, Samsung Mobile

source: WSJ

19 Comments
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posted on 28 Jul 2013, 23:53

1. TakashiPerun (banned) (Posts: 20; Member since: 21 Jul 2013)


not only Z ultra
note 3 and Sony honami will be announced together on same day

posted on 29 Jul 2013, 00:03 14

2. mi55u (unregistered)


Still better than Apple, Nokia, and HTC combined

posted on 29 Jul 2013, 00:08 11

3. raunak (Posts: 504; Member since: 12 Oct 2011)


Nope.

posted on 29 Jul 2013, 00:13 10

4. mi55u (unregistered)


You must be new here

posted on 29 Jul 2013, 00:13 10

5. TakashiPerun (banned) (Posts: 20; Member since: 21 Jul 2013)


ok nokia fanboy
what r u doing here?
u told sammy fanboys not to jump into nokia and wp articles..
so u urself r here??
why??
afraid?
even if samsung says low
do u even know what is low according to samsung??
if they expect 50 million for q3
then for them low is 35-40 million
and for.ur nokia u know wht is low??
2 million

posted on 29 Jul 2013, 00:21 10

7. mi55u (unregistered)


Truth always hurts, doesn't it?

posted on 29 Jul 2013, 00:26 8

8. TakashiPerun (banned) (Posts: 20; Member since: 21 Jul 2013)


lol yes
stupid nokia fanboys can only see samsung selling 15x more than lumia :D
lol..and then they jump here and try to ,just try to bash samsung as if they are paid by Nokia....
they dont even know what is LOW according to Samsung Dictionary

posted on 29 Jul 2013, 03:21 1

14. cam-whore (Posts: 164; Member since: 21 Feb 2013)


you mad?

posted on 29 Jul 2013, 01:09 3

11. tech2 (Posts: 2078; Member since: 26 Oct 2012)


Well, I wouldn't include Apple but the profits will still be more than Nokia, HTC & even LG combined !

posted on 29 Jul 2013, 02:54 1

13. Trex95 (Posts: 544; Member since: 03 Mar 2013)


NOPE.

posted on 29 Jul 2013, 00:14 3

6. sri_tech (Posts: 188; Member since: 21 May 2013)


Yes. The competition is fierce in countries like India, where they enjoyed more than 40% market share(higher than world wide share) till now.

There are many Indian companies that are selling cheap android phones with good specs. Also, devices like Lumia 520/620/720 and Sony Xperia L are eating into Samsung's market share this year.

To maintain the market share they had to reduce prices of their handsets by huge amount which is why their ASP's are down.

Ex: Galaxy S duos launched at Rs 18K. Now its reduced to Rs 9.5K in less than 9 months because of the Lumia 520, Micromax Canvas 2 etc..
Same thing happened with Galaxy S advance which launched at Rs 27K and now selling for Rs 13K.

posted on 29 Jul 2013, 00:51 10

9. horsecock (unregistered)


Interesting story but I'll love my S4 until the S5 drops...Sammy is KING...

posted on 29 Jul 2013, 15:24

17. AnTuTu (Posts: 816; Member since: 14 Oct 2012)


Would buy Note 3 and then S5 :p

posted on 29 Jul 2013, 00:54 7

10. iushnt (Posts: 655; Member since: 06 Feb 2013)


Sammy!! make the note 3 exceptional..

I find note 2 the best in its class and note 3 following the way. As far as I have seen comparisions, Note 2 has the best battery life, decent specification and the main point is productivity related from S-pen. Also not to forget good update policy from sammy compared to other android OEMs.

Personally, I don't need note series as S4 is the best size for me but there are many people who like the s-pen and its 1024 levels of pressure sensor (in note 2) which makes them writing and drawing easy. This time I expect more productivity features in S-pen. I have few friends who get note 2 just for drawing and they draw amazing. I have seen many drawing using note 2 and note 10.1 in internet.

posted on 29 Jul 2013, 02:33 7

12. livyatan (Posts: 692; Member since: 19 Jun 2013)


The Z Ultra is a tablet

posted on 29 Jul 2013, 07:12 1

15. ebubekir26 (Posts: 311; Member since: 21 Dec 2012)


yep, WAY to large for a tablet

posted on 29 Jul 2013, 07:15 6

16. ebubekir26 (Posts: 311; Member since: 21 Dec 2012)


OH BOY, HERE COMES THE BEAST
NOTE 3 WILL KILL EVERYTHING. (fact)
don't even compare the Z Ultra with Note III, I mean come on, the Z Ultra is scared already, let's not make it sh*t itself lol xD

posted on 29 Jul 2013, 15:44 1

18. trustory (Posts: 106; Member since: 23 Jan 2013)


z ultra is a tablet ain't nobody got hands for that

posted on 30 Jul 2013, 04:45

19. JMartin22 (Posts: 1116; Member since: 30 Apr 2013)


Lol, the Sony Xperia Z Ultra is a design engineering disaster. Compared to even something like the Galaxy 6.3 Mega It has:

- A bigger physical shell
- A smaller screen [thanks to on-screen software buttons]
- And smaller battery on that bigger shell

There's no doubt that the Note III will demolish it both in design and function. The HTC One Max is likely just to be a bigger variant of the HTC One [Read: outclassed]

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