Samsung forecasts massive drop in profits

By Trevor Mogg October 7, 2014

Samsung Galaxy Alpha front top — Image used with permission by copyright holder

Blip or no blip, Samsung’s dire profit forecast for Q3 will likely have executives at the company sleeping less comfortably as they look for ways to prevent the situation from sliding out of control.

Operating profit for the quarter ending September 30 is expected to come in at 4.1 trillion won ($3.8 billion). While this may sound healthy enough, it marks a hefty 60 percent drop on the same quarter a year earlier. The official results will be released by the company later this month.

Samsung, which sells a huge range of electronics, derives the majority of its profit from its mobile business, a sector that right now is as competitive as it’s ever been.

The Korean tech giant has been hit in part by slower-than-expected sales of its high-end handsets – its flagship Galaxy S5 phone among them – as the mobile sector in developed markets nears saturation point. Samsung is also facing increasing competition from cheaper devices offered by local firms in emerging markets like China and India.

In Q2 of this year, for example, Beijing-based Xiaomi knocked Samsung off the top spot to become the biggest seller of smartphones in China, with 14 percent of the market compared to Samsung’s 12. In Q1 Samsung enjoyed an 18.3 percent share.

In the US market, meanwhile, Apple and Samsung continue to slog it out, though Apple will be hoping that its new large-screen iPhone 6 devices will be enough to give it the edge over its Korean rival in the run up to Christmas and beyond.

Increased spending on marketing, as well as a lower average selling price for its handsets, have also had an impact on Samsung’s accounts. Sales of its TVs and air conditioners have come under pressure, too, as a strong won and weak yen make some Japanese products more attractive to consumers.

In a statement issued Tuesday, Samsung said it’s gearing up to launch “new smartphone line-ups featuring new materials and innovative designs,” as well as a number of new competitively priced smartphones.

The Seoul-based firm has more recently dived into the wearables market with the launch of smartwatches and other devices in a bid to boost profits.

[Via BBC, Bloomberg]

Editors' Recommendations

Topics

Contributing Editor

Not so many moons ago, Trevor moved from one tea-loving island nation that drives on the left (Britain) to another (Japan)…

Mobile

Samsung’s next folding phone could be cheaper than we thought

Samsung Galaxy Z Fold 5, Galaxy Z Fold 4, and Galaxy Z Flip 5 resting on a table.

the Samsung Galaxy Z Fold 4 (from left) Galaxy Z Fold 5, and Galaxy Z Flip 5 Andy Boxall / Digital Trends

It increasingly seems likely that Samsung’s foldable phone strategy is aiming for a lower price bracket. Right now, a taste of Galaxy foldables will cost you a minimum of $1,000. However, an upcoming entry-level foldable phone might bring that barrier down to just $800.

Mobile

Google Messages vs. Samsung Messages: Which app should you use?

Google messages versus samsung messages app icons side by side on Galaxy Z Fold 5.

Amid the rise of third-party messaging apps, texting remains a popular means of messaging in the U.S. If you own an Android phone, you've likely used or heard of Google Messages, which is positioned as the default text messaging app for Android. It is the culmination of Google's long history with multiple messaging platforms. Google has pursued smartphone companies to use its Dialer and Messages apps as their default since at least 2017 and now mandates them to use Google Messages as the default messaging app on all devices.

Meanwhile, if you have been a Samsung user in the past, you have likely also known and experienced the Samsung Messages app, which comes preinstalled on all Samsung phones and cannot be uninstalled. This is despite losing its spot as the default messaging app on Samsung Galaxy smartphones.

Mobile

Best Samsung Galaxy S24 deals: Save up to $800 on the phone

Samsung Galaxy S24 in Marble Gray showing Google Maps.

The Samsung Galaxy S24 is Samsung’s newest flagship smartphone. It’s a great phone to shop if you’re looking for the newest tech and software you can get in a smartphone, but it’s also a great phone to shop if you’re looking for some of the best phone deals currently taking place. You might not expect to find substantial savings on such a new phone, but there’s a lot of ways out there to save big on a new Samsung Galaxy S24.
Today's best Galaxy S24 deals
When it comes to landing the best Samsung Galaxy S24 deals, purchasing from your favorite carrier may be your best option. Massive discounts are available if you’re willing to sign a new contract or add a new line. Most carriers are currently offering major discounts with an eligible trade-in device as well, but you can also save on an unlocked version of the Galaxy S24 by purchasing directly from Samsung.

-- Get up to $550 instant trade-in credit with exclusive colors available and discounts on other Samsung devices.
-- Get up to $800 in credit over 36 months with an eligible trade-in device and a qualifying unlimited plan.
-- Get up to $800 in savings applied over 36 months when you trade-in an eligible device and add a new line.
-- Get up to $1,000 monthly bill credits when you trade in an eligible phone.
-- Get up to $800 trade-in credit when you pay over 24 months.
-- Get up to $500 trade-in credit when you trade in an eligible device.