Samsung: smartphone growth to slow in Q3

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.


source: WSJ

FEATURED VIDEO

19 Comments

1. TakashiPerun

Posts: 20; Member since: Jul 21, 2013

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

2. mi55u unregistered

Still better than Apple, Nokia, and HTC combined

3. raunak

Posts: 507; Member since: Oct 12, 2011

Nope.

4. mi55u unregistered

You must be new here

5. TakashiPerun

Posts: 20; Member since: Jul 21, 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

7. mi55u unregistered

Truth always hurts, doesn't it?

8. TakashiPerun

Posts: 20; Member since: Jul 21, 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

14. cam-whore

Posts: 164; Member since: Feb 21, 2013

you mad?

11. tech2

Posts: 3487; Member since: Oct 26, 2012

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

13. Trex95

Posts: 2377; Member since: Mar 03, 2013

NOPE.

6. sri_tech

Posts: 188; Member since: May 21, 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.

9. horsecock unregistered

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

17. AnTuTu

Posts: 1596; Member since: Oct 14, 2012

Would buy Note 3 and then S5 :p

10. iushnt

Posts: 3083; Member since: Feb 06, 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.

12. livyatan

Posts: 867; Member since: Jun 19, 2013

The Z Ultra is a tablet

15. ebubekir26

Posts: 337; Member since: Dec 21, 2012

yep, WAY to large for a tablet

16. ebubekir26

Posts: 337; Member since: Dec 21, 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

18. trustory

Posts: 132; Member since: Jan 23, 2013

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

19. JMartin22

Posts: 2355; Member since: Apr 30, 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]

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.