Lower smartphone shipments lead to decline in Samsung's Q2 earnings

Lower smartphone shipments lead to decline in Samsung's Q2 earnings
Samsung on Thursday, reported second quarter operating profit of 7.9 trillion won ($7 billion USD). That is a 17.1% decline from the 9.53 trillion won in operating profit ($9.3 billion USD) that Samsung reported in last year's second quarter. Revenue was 52.35 trillion won ($51 billion USD), off 8.9% from the 57.46 trillion in revenue ($52 billion USD) that Sammy scored in the 2013 period.

As IDC's latest stats reveal, Samsung had a tough period from April through June. With Chinese smartphone manufacturers like Huawei and Lenovo reporting tremendous year-over-year smartphone shipments for the period, Samsung's leading market share declined from 32.3% to 25.2%. For the quarter, Samsung shipped 74.3 million smartphones globally, down 3.9% from 2013's 77.3 million units shipped.

Tablets were also a problem for Samsung in the quarter, as sales of 5 inch to 6 inch smartphones reduced demand for smaller slates. In addition, the replacement cycle for new tablets has lengthened. Earlier this month, Samsung said that it expected to see improvement during the third quarter thanks to the release of new smartphones. The manufacturer could be referring to the Samsung Galaxy Alpha and the Samsung Galaxy Note 4. The former appears to be Samsung's direct challenger to the Apple iPhone 6 with a metal casing, 4.8 inch display, a quad-core 2.7GHz Snapdragon 805 CPU under the hood, 3GB of RAM, and back and front-facing cameras of 16MP and 2MP respectively. Android 4.4.4. would be pre-installed.

The Samsung Galaxy Note 4 could launch with a 5.7 inch 1440 x 2560 resolution display, with the octa-core Exynos 5433 powering the device. The camera set-up would match what is on the Galaxy Alpha, and 3GB of RAM would be expected inside. Still, Samsung will have to go up against the Apple iPhone 6 and the 5.5 inch Apple iPhone phablet in the second half of the year, along with highly competitive models like the Sony Xperia Z3. For Samsung to pull off a comeback for the remainder of 2014, it cannot afford to disappoint for the rest of the year.

source: BusinessInsider

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66 Comments

1. Odiin

Posts: 373; Member since: Apr 23, 2013

Skyfall! Karma!! Bi@#h!!!

3. PapaSmurf

Posts: 10457; Member since: May 14, 2012

Lmfao I'm never surprised to see you here. Read the article and guess how much they took home in profits. Hint: every OEM besides Apple would kill to have a third of that. Keep the hate comments coming. ;)

10. JakeLee

Posts: 1021; Member since: Nov 02, 2013

Experts look at this quite differently. This kind of earning shock is a very bad sign, and Sammy can't present any future plan for improving the situation. As I kept telling last year, GS5 didn't sell very well, and it will be the same for the upcoming Note4 for the very same reason : not much better than the predecessor. The party is over for Android, especially for Sammy.

16. xperiaDROID

Posts: 5629; Member since: Mar 08, 2013

Believe in reality, not by the looks of it. Android is the biggest clan of all, with the army of soldiers like Samsung, Sony, HTC, LG, Mototola, Google, Huawei, Xiaomi, Vivo, ZTE etc., do you think this big clan can be beaten in a short amount of time? No. Even if Sammy is falling, the Android clan still remains strong. Think positive, look positive, that's what keeps you moving.

36. itsdeepak4u2000

Posts: 3718; Member since: Nov 03, 2012

After so long time. What's that new avatar? If Sammy improves their design then they can earn more. As all galaxies looks the same.

41. xperiaDROID

Posts: 5629; Member since: Mar 08, 2013

The avatar is a character from Killzone Shadow Fall. I agree, Sammy should improve their design if they want to prevent themselves from falling and since they hired a new designer, it's possible. Also, they should also remove their bloatware, their Touchwiz still lags.

25. Odiin

Posts: 373; Member since: Apr 23, 2013

Even I'm not attall surprised to see your reply here. I just pointed out declining market share. That doesnt mean I hate Samsung nor Im comparing it to other OEMs. Everyone knows no other OEMs cant come close to Samsung even if combine together. Keep it your sales figure with yourself. It started to decline n market share also dipping. Thats the point here. Height of fanboyism!

52. marcski07

Posts: 600; Member since: Apr 25, 2014

what goes up, must come down... they need a flagship on every tier with different design, they have to compete with low end, mid end, high end without sacrificing the design of each tier, and make it look premium as much as possible on every category. e.g "Note" series and "S" series and "Z" series. NOTE = high end flagship S series = mid end flagship Z series = low end flagship so they will have unique features that the consumer can choose. of course highend has all the features! S series can have that camera centric, selfie centric and other variation, but still keeping the mid range feel... Z series will have the down graded features but still it will have variations and beautifully designed, not generic looking so it will still pop out among other low end devices.. samsung galaxy look all the same, they've become generic/cheap looking device. sony, lg, htc can do it, why samsung can't??

4. Busyboy unregistered

Karma for what?

6. xperiaDROID

Posts: 5629; Member since: Mar 08, 2013

Karma for trolling.

12. derivativex

Posts: 176; Member since: Jul 15, 2014

yes party is over with more than 65 Billion of cash pile woot woot

13. LeBrownJames

Posts: 201; Member since: Mar 17, 2014

It's not karma, it's what we call business. You win some you lose some.

2. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

While XiaoMi is gaining steam.. Samsung need to add more value to their device. Remove the bloatware

5. xperiaDROID

Posts: 5629; Member since: Mar 08, 2013

First of all, congrats to Xiaomi. And second, Samsung will most likely not remove the bloatware unless Samsung fire their head of software team.

62. Arte-8800

Posts: 4562; Member since: Mar 13, 2014

They need to start using more Ram, cause every features they add on takes up Ram and uses Cpu to idol at more higher frequency.

7. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

Dear Samsung, stop screwing over power users and developers. Go back to easy root and unlocked bootloaders. And also: -- Make KNOX optional so that if you want it, you have to install it. -- Disallow any carrier bloatware on your phones, just like Apple. -- Make all of your Samsung bloatware something the user installs if they want to. -- Consider making the phones more affordable off contract. -- Really focus more energy on making TouchWiz lighter, speedier, and better organized. -- Push forward key camera tech, like OIS cameras. -- Add an "action button" on all of your flagship phones, not just the "Active" model. -- Improve the audio quality of your Qualcomm-based phones when used with headphones.

18. Furbal unregistered

Yes to all please. Knox and ois are why I sold my note 3

63. Arte-8800

Posts: 4562; Member since: Mar 13, 2014

Dear Samsung more Ram and Exynos cpu please.

8. LeBrownJames

Posts: 201; Member since: Mar 17, 2014

Chinese mobile phone companies have gained tremendously because of their lower priced phones. They have also conquered the midrange and lower end realms which Samsung has more than half of its market share. This trend will just continue in the next several years.

9. GreekGeek

Posts: 1276; Member since: Mar 22, 2014

I guess its getting harder and harder to justify spending $700-$800 on a flagship phone when brands like Xiaomi and Asus can deliver the goods for a fraction of the price. Sadly, it will only get worse for Samsung.

11. derivativex

Posts: 176; Member since: Jul 15, 2014

and yet they still sold more phones than anyone else, made more revenue than any tech company in the world, is second to apple only in net profits, yes karma!!!!

14. GreekGeek

Posts: 1276; Member since: Mar 22, 2014

17 percent decline is ALARMING. Blackberry and Nokia suffered the same fate, what makes you think Samsung is immune? Ima bet Samsung's CEO isn't too thrilled of that.

17. JakeLee

Posts: 1021; Member since: Nov 02, 2013

Where is Nokia now despite the absolute dominance? Where is Motorola now despite the Razr's phenomenal success? In this business, it doesn't take many consecutive declines in earning profit to become the prey.

19. derivativex

Posts: 176; Member since: Jul 15, 2014

consecutive? Q1 2014 had a higher net profit than Q1 2013, check your facts please

24. JakeLee

Posts: 1021; Member since: Nov 02, 2013

YoY q4 : 8.8 vs 8.3 q1 : 8.7 vs 8.4 q2 : 9.5 vs 7.2 THREE consecutive quarters with declines in profit. The worst thing is the q2 decline over q1 : GS5 failed. That's FAR more than alarming.

27. derivativex

Posts: 176; Member since: Jul 15, 2014

dear do you know the difference between operating profit and net profit? Net profit Q1 2013 - 6.4 billion dollars net profit Q1 2014 - 7.3 billions dollars Yes let's ignore the facts!

33. JakeLee

Posts: 1021; Member since: Nov 02, 2013

Aha, when people talk about profits, it's almost always operating profit due to the fact that there are too many variables with net profit preventing from reflecting the real situation.

35. derivativex

Posts: 176; Member since: Jul 15, 2014

and yet net profit represents the bottom line while operating profit does not. nice try but facts proved you wrong

37. JakeLee

Posts: 1021; Member since: Nov 02, 2013

net profit is the prime subject to window dressing fraud which Sammy is THE expert in. Go study 101 of economy instead of putting yourself down any further.

39. derivativex

Posts: 176; Member since: Jul 15, 2014

haha cant get out of this jakelee? feeling bad you cant refute the facts even if hit you in your face? Yes their net profit is certainly a fraud why dont you file a case against them if you're so sure that it's a fraud haha. but here's a little fact that will further shame your figures (and since you did bring up variables as an excuse, ill present to you a variable which you didnt see). because of the strong korean won, you might think the operating cost is lower, but in US dollars it's not. Operating profit Q1 2013

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