Home
News
You are here

With profit margins slipping, Samsung cutting phone models and production costs by a third

31comments

By Daniel Petrov

Updated: Nov 18, 2014, 2:40 AM

With profit margins slipping, Samsung cutting phone models and production costs by a third

There are major changes brewing at Samsung, reports the Wall Street Journal, and chief among those is the fact that we will be seeing far fewer Galaxy Megas, Cores, Grands, Aces and so on. Even we already lost count of those, and we doubt anyone is trying to keep up anyway, as the tens of phones that Samsung is turning every year with very minor specs and design differences to each other and even their predecessors got very confusing very quickly.

Not anymore, though, as Robert Yi, head of investor relations, confirmed during a presentation in New York that it will be cutting its model portfolio almost by a third next year. Samsung's profit margins from the mobile business, which are its bread and butter, were cut in half this year, due to the increased competition from both other companies' flagships, and from the Chinese makers on the low- and mid-range side. That is why Samsung recently issued a memo to suppliers for cutting costs by 30%, and now intends to “increase the number of components shared across mid- to low-end models, so that we can further leverage economies of scale,” as per one executive.

All in all, this bodes well for having far fewer Samsung handsets next year, and hopefully this will increase the margins sufficiently, so that Samsung focuses on making unique handsets on the high end, which it seemingly intends to do, starting with an eventual dual-edged Galaxy S6, or whatever the Project Zero undertaking gets named in the end.

source: WSJ

$180

$360

$180 off (50%)

Mint Mobile is also offering an incredible bargain for those seeking unlimited data! The carrier's latest deal lets you grab any unlimited plan for just $15/mo, bringing the 12-month Unlimited plan to $180 instead of $360.

Buy at Mint Mobile

View Full Bio

Daniel, a devoted tech writer at PhoneArena from 2010 to 2025, has been engrossed in mobile technology since the Windows Mobile era. His expertise spans mobile hardware, software, and carrier networks, and he's keenly interested in the future of digital health, car connectivity, and 5G. Beyond his professional pursuits, Daniel finds balance in travel, reading, and exploring new tech innovations, while contemplating the ethical and privacy implications of our digital future.