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Samsung reports second quarterly drop in profits, blames premium phone sales

post #1 of 69
Thread Starter 
Samsung Electronics reported quarterly operating profits of 8.5 trillion South Korean won ($8.2 billion), a -3.3 percent change from the year ago quarter and its second quarterly drop in a row; the company blamed slowing high-end smartphone and flat screen sales.

Samsung logo


According to a report by Reuters, the results sent the company's stock up slightly by 0.3 percent, because the company had previously guided for operational profit of just 8.4 trillion won.

The entirety of Samsung Electronics, which includes Consumer Electronics (televisions and appliances); IT & Mobile (networking gear; phone, PC and tablets) and Device Solutions (display and chip components) reported net cash after debt of 49 trillion won ($47.5 billion) and cash flow from operations of 12.21 trillion won ($11.8 billion).

Apple, which sells products comparable to Samsung's Mobile group, reported net cash of $150.6 billion and $17 billion debt, a difference of $133.6 billion, and cash flow from operations of $13.5 billion. Apple remains a major customer of Samsung's Device Solutions group for a variety of its components of fabrication of its custom Application Processors.

Trouble in mobile



Reuters stated that "Samsung's mobile business is poised for an uncertain 2014, analysts say. Its broad range of low-end phones are being caught by the improving quality of Chinese-made offerings, while the large-screen advantage of its top-range phones could be countered by new models from Apple Inc."

Samsung Mobile reported profits of 6.43 trillion won ($6.2 billion), down 1.2 percent from a 6.51 trillion won profit a year earlier. For the same quarter, Apple reported twice as much operating income, $13.6 billion, an increase of 8.24 percent over the year ago quarter.

While the company doesn't report sales numbers of products like Apple does, its earnings overview described the mobile market as suffering "lower smartphone/tablet demand under weak seasonality."

The company noted that in developed markets, "channel inventory increased due to intensified competition from the previous quarter" while in emerging markets "demand decreased under weak market condition in EM including China."

Samsung Q1 2014


Looking forward, Samsung observed the over the next quarter, it expects "slight growth QoQ as weak seasonality to continue in 2Q" for phones, and for tablets, "slight demand growth under weak seasonality" and it "forecast competition to intensify with line up diversification by set makers amid slowdown of growth trend."

Apple seeing different demand in mobile



Reporting on the same quarter, Apple just announced a very different picture of the global smartphone market. "iPhone was key in driving our stronger-than-expected results," Apple's chief executive Tim Cook told analysts last week.

"We sold almost 44 million iPhones, setting a new March quarter record," he noted, stating, "These stronger results were broad-based both from a product point of view with demand for each of our three iPhone stronger than its predecessor and from a geographic standpoint."

Cook added, "We gained smartphone share in many developed and emerging markets including the U.S., the UK, Japan, Canada, Germany, France, Vietnam and Greater China, just to mention a few. In fact, we established a new all-time record for total iPhone sales in the BRIC [Brazil, Russia, India and China] countries."A significant part of the high end smartphone demand that Apple saw but Samsung didn't appears to be related to the Android to iOS switcher effect

Responding to a question about China, Cook answered, "we did have an all-time revenue record in Greater China, just under $10 billion at $9.8 billion. iPhone sales were up 28%, that's versus the IDCs market forecast of 20% growth. So we gained share."

A significant part of the high end smartphone demand that Apple saw but Samsung didn't appears to be related to the Android to iOS switcher effect Cook mentioned.

"I think it's important to point out that if you look at some of the numbers we're seeing on first-time iPhone buyers," Cook noted, "people that bought the iPhone 4S: 85% were first-time iPhone buyers. And the 5c: 69% first-time iPhone buyers. So these are extraordinary, and as you would expect, these are also heavily Android switchers: 62% of the people that bought the 4s switched from Android. 60% of the people that bought the 5c switched from Android. And so we're incredibly pleased with this."

On tablets, Cook said, "iPad sales came in at the high end of our expectations, but we realized they were below analyst estimates." He also noted that "over two-third's of people registering an iPad in the last six months, were new to iPad, while over half of the people registering iPhones were new to iPhone."
post #2 of 69
Just imagine the backlash Apple would have if they dropped 3.3% and announced it was from weakening iPhone sales.

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #3 of 69
Somehow the analysts will spin this as bad news for Apple.

So much for marketing.
post #4 of 69
Now that Samsung's copy-machine is under the microscope, Samsung has to actually try creating it's own stuff and without its R&D department in Cupertino, one can see the sheer crap that's been coming out from that company.

Add TizenOS on top of that soon to jettison that botched-experiment called "Android", and it's all downhill from there.
post #5 of 69

As amusing as the Samsung bubble bursting is to watch, calling this a quarterly loss is quite a bit of a stretch. They did still manage to make $8.2 BILLION (with a B).

 

Quarterly drop YoY =/= Quarterly loss

post #6 of 69
Quote:
Originally Posted by sflocal View Post

Now that Samsung's copy-machine is under the microscope, Samsung has to actually try creating it's own stuff and without its R&D department in Cupertino, one can see the sheer crap that's been coming out from that company.

Add TizenOS on top of that soon to jettison that botched-experiment called "Android", and it's all downhill from there.
Like this?


I hear they're planning to release a "premium" S5 with a metal case and higher res display. I'd be pissed if I was a current S5 owner.
post #7 of 69
Obviously Samsung have plateaued, Apple are still growing.

It must be the convenient screen size, the most popular on earth.
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Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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post #8 of 69
Quote:
Originally Posted by Rogifan View Post


Like this?


I hear they're planning to release a "premium" S5 with a metal case and higher res display. I'd be pissed if I was a current S5 owner.

 Unless they come out with a premium something there "S" line is dead

post #9 of 69
I like how Apple gets an ultra-negative narratove, vicious analyst reports, and proclamations of doom when it doesn't "grow" as dramatically as some would like- meanwhile, Samsung is actually making LESS profit YoY in the mobile business, yet the narrative is that they're crushing Apple. Hilarious.
post #10 of 69
Quote:
Originally Posted by Slurpy View Post

I like how Apple gets an ultra-negative narratove, vicious analyst reports, and proclamations of doom when it doesn't "grow" as dramatically as some would like- meanwhile, Samsung is actually making LESS profit YoY in the mobile business, yet the narrative is that they're crushing Apple. Hilarious.

You know I always see someone in the comments saying "ultra negative, vicious analyst reports, and proclamations of doom" yet I never actually see these reports. Where are you getting your news?

post #11 of 69
Quote:
Originally Posted by Brandon Powell View Post



 Unless they come out with a premium something there "S" line is dead
I still think they consider the Note to be their premium device. All I know is I would be pissed if I bought an S5 and then a couple months later a "premium" version hit the shelves.
post #12 of 69
Also, this is the calm before the storm. Samsung has peaked. When Apple releases its new iPhone lineup, there's absolutely nothing Samsung will be able to do to compete against that. The only thing they have left- which they're desperately trying to leverage- the large screen, will be irrelevant. Apple has played it strong and steady, meticulously and significantly improving all the critical aspects of the iPhone (CPU, Touch ID, etc) that Samsung has been unable to match in any way whatsoever- and the crushing blow will come from a new, larger form factor option that will decimate any appeal Samsung phones will have, for most.
post #13 of 69
Quote:
Originally Posted by Brandon Powell View Post

You know I always see someone in the comments saying "ultra negative, vicious analyst reports, and proclamations of doom" yet I never actually see these reports. Where are you getting your news?

Just a few recent ones:
http://www.forbes.com/sites/investor/2014/04/24/apple-rotting-from-the-core/
http://abcnews.go.com/Technology/apple-quit-steve-jobs/story?id=23424135
http://www.cnbc.com/id/101608060
http://www.nytimes.com/2014/04/12/opinion/nocera-the-apple-chronicles.html?_r=0
http://www.forbes.com/sites/petercohan/2014/04/07/four-reasons-to-avoid-apple-stock/
Edited by Rogifan - 4/28/14 at 8:55pm
post #14 of 69
Quote:
Originally Posted by Rogifan View Post

 I would be pissed if I bought an S5 and then a couple months later a "premium" version hit the shelves.

Exactly! At least announce them at same time like Apple did with 5s and 5c. It just seems like a money grab to release them months apart.

post #15 of 69
Quote:
Originally Posted by Brandon Powell View Post

Exactly! At least announce them at same time like Apple did with 5s and 5c. It just seems like a money grab to release them months apart.
Almost feels like some of the "meh" GS5 has Samsung scrambling to make a "premium" device. They've they diluted that brand so much with all the different variants another one certainly wouldn't shock me.
post #16 of 69
Quote:
Originally Posted by Slurpy View Post
 

 

You don't see critical Apple news stories on mainstream media sites? Then you must be fucking blind, purposely obtuse, or a troll. Probably all 3, going by your previous posts. 


Trolls like him say nonsense like that just to get a reaction.  Apparently, he has no ability to use a service called "Google" to answer his question.

post #17 of 69
Quote:
Originally Posted by Slurpy View Post
 

 

You don't see critical Apple news stories on mainstream media sites? Then you must be fucking blind, purposely obtuse, or a troll. Probably all 3, going by your previous posts. 

 

Quote:
Originally Posted by sflocal View Post
 


Trolls like him say nonsense like that just to get a reaction.  Apparently, he has no ability to use a service called "Google" to answer his question.

I am neither, I don't go to general news websites like abc, forbes, cnbc for my tech news. What do these sites know about tech, they aren't tech enthusiasts. Also whats wrong with my previous posts?

post #18 of 69
Quote:
Originally Posted by AppleInsider View Post

Samsung Electronics reported quarterly operating profits of... $8.2 billion... its second quarterly loss in a row. 

 

Dude, that doesn't make sense.

post #19 of 69

I think DED needs a write up on this:

 

http://t.co/duZ71wsOV3

post #20 of 69
Quote:
Originally Posted by Rogifan View Post

I would be pissed if I bought an S5 and then a couple months later a "premium" version hit the shelves.

 

I was pissed after buying the 3rd gen iPad only to have it replaced 6 months later with the 4th gen, at the time that seemed like a money grab. If I had known about the 4th gen I would have waited for it.

 

Having said that, I still have my 3rd gen and it is still running great.

post #21 of 69
Samsung can't bribe journalists and pay forum posters to deny the reality of its ongoing lowered earnings.
post #22 of 69
Quote:
Originally Posted by hill60 View Post

Obviously Samsung have plateaued, Apple are still growing.

It must be the convenient screen size, the most popular on earth.


Also perhaps the "spyware first" Android OS is losing favor with the higher end buyer.

post #23 of 69
Quote:
Originally Posted by Rogifan View Post

I hear they're planning to release a "premium" S5 with a metal case and higher res display. I'd be pissed if I was a current S5 owner.

I hear the Samsung  Galaxy S4 is currently the hottest Samsung phone.

http://www.dailymail.co.uk/news/article-2600682/Mobile-phone-catches-fire-owner-leaves-charge-asleep.html

Civil servant wakes up at 5am to find her PHONE on fire and 'sizzling' beside her bed

 

 

post #24 of 69
Originally Posted by 512ke View Post
Samsung can't bribe journalists and pay forum posters to deny the reality of its ongoing lowered earnings.

 

They can, however, cook the books.

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I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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post #25 of 69
What comes to mind, the jig is up.
post #26 of 69

It's the beginning of the end!

 

Just wait until Apple releases the next iPhone and iPad models! Nobody will be able to compete!

 

Nobody else is even close to the iPhone 5s, and they will all be even further behind when the various iPhone 6 models drop later this year.

 

The same desperate morons who panicked and dismissed 64 bit are now busy scrambling trying to figure out how to keep up with Apple and their relentless pace of innovation. Apple took everybody by surprise by moving to 64 bit. Apple looks to the future. Android manufacturers look to the present, and they're just trying to get ignorant fools to part with their money. They don't give a crap about what happens to the customer's phone 6 months after they've already bought it.

 

Android phones are a no profit business. It's a loser's game. Even Samsung is doing poorly now. Is there any Android phone manufacturer that is not hurting? It's a business for losers who sell mostly cheap junk to people who can not afford anything else. All of the activations in the world doesn't really mean crap, because most Androids are not really being used as smartphones. This assertion is backed up by all sorts of usage stats. Fandroids might as well be invisible, because they're extremely underrepresented, based on their alleged numbers. Android phones are more like feature phones with large screens. And it seems that their customer base might as well be feature phone users. How pathetic is that?

 

And this massive Apple slaughter that's going to be taking place is not even taking into account any other Apple products that might get released, such as the iWatch, or whatever it's going to be called, and also some sort of new Apple TV.

 

The main Android phone "innovation" has been increasing the screen size every year (more like every week), big deal, whoopdeedoo. They've now reached a point where they can't really go any bigger. The current phones are already too ridiculously large. They're stuck!

 

Apple still has plenty of room left to maneuver when it comes to screen size, should they decide to.

Android has got nothing, besides a horrible OS.

 

For a change, the stars seem to be aligned in Apple's favor at the moment. AAPL is doing good, and moving up really quick. When AAPL first gets going, it's like a rocket.


Edited by Apple ][ - 4/28/14 at 10:23pm
post #27 of 69
Quote:
Originally Posted by Tallest Skil View Post

They can, however, cook the books.

I think it would be unlikely for Samsung to be cooking the books in any illegal sense, but they definitely are arranging end-of-quarter sales to help make the quarter look better on paper. The problem is that it all comes to a head so any "sales" that become "refunds" will eventually be counted. Apple surely does the same thing but their small number of products and short inventory coupled with their high demands means it's minimal.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

Reply

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

Reply
post #28 of 69

The fundamental, inescapable problem Samsung faces with its smartphones is that no matter how hard and how well they copy Apple, they're still running the device on a crap platform.  And it will always be crappy because Apple's design goal is to build the best products while Google's is to sell the most ads.  And since ads are basically seen as a nuisance by most people, if you design a product to maximize your ad sales then of course you will be sacrificing user experience to your primary objective.  Crappy will always win out in the end with Google.  But no, Google is not throwing their customers under the proverbial bus --don't forget that the Android phone user is not their customer.

post #29 of 69
Quote:
Originally Posted by jungmark View Post

Somehow the analysts will spin this as bad news for Apple.

So much for marketing.

 

You know in the past I would agree...but after last weeks earnings call, I think Apple has finally dispelled the BS meter from Samsung and also the absolutely stupid analysts have gotten their heads out of their collective @$$es and realize that Samsungs marketing blitz was all smoke and mirrors.

 

This also could be why Apple was up even more today...Samsung's loss = Apple's gain.

post #30 of 69
Quote:
Originally Posted by Apple ][ View Post
 

It's the beginning of the end!

 

Just wait until Apple releases the next iPhone and iPad models! Nobody will be able to compete!

 

Nobody else is even close to the iPhone 5s, and they will all be even further behind when the various iPhone 6 models drop later this year.

 

The same desperate morons who panicked and dismissed 64 bit are now busy scrambling trying to figure out how to keep up with Apple and their relentless pace of innovation. Apple took everybody by surprise by moving to 64 bit. Apple looks to the future. Android manufacturers look to the present, and they're just trying to get ignorant fools to part with their money. They don't give a crap about what happens to the customer's phone 6 months after they've already bought it.

 

Android phones are a no profit business. It's a loser's game. Even Samsung is doing poorly now. Is there any Android phone manufacturer that is not hurting? It's a business for losers who sell mostly cheap junk to people who can not afford anything else. All of the activations in the world doesn't really mean crap, because most Androids are not really being used as smartphones. This assertion is backed up by all sorts of usage stats. Fandroids might as well be invisible, because they're extremely underrepresented, based on their alleged numbers. Android phones are more like feature phones with large screens. And it seems that their customer base might as well be feature phone users. How pathetic is that?

 

And this massive Apple slaughter that's going to be taking place is not even taking into account any other Apple products that might get released, such as the iWatch, or whatever it's going to be called, and also some sort of new Apple TV.

 

The main Android phone "innovation" has been increasing the screen size every year, big deal. They've now reached a point where they can't really go any bigger. The current phones are already too ridiculously large. They're stuck!

 

Apple still has plenty of room left to maneuver when it comes to screen size, should they decide to.

Android has got nothing, besides a horrible OS.

 

For a change, the stars seemed aligned in Apple's favor at the moment. AAPL is doing good, and moving up really quick. When AAPL first gets going, it's like a rocket.

Remember that moron from Qualcomm that said the 64 bit was a marketing joke...he's was reassigned...lol.

post #31 of 69
Quote:
Originally Posted by Apple ][ View Post

The same desperate morons who panicked and dismissed 64 bit are now busy scrambling trying to figure out how to keep up with Apple and their relentless pace of innovation. Apple took everybody by surprise by moving to 64 bit. Apple looks to the future. Android manufacturers look to the present, and they're just trying to get ignorant fools to part with their money. They don't give a crap about what happens to the customer's phone 6 months after they've already bought it.

The main Android phone "innovation" has been increasing the screen size every year (more like every week), big deal, whoopdeedoo. They've now reached a point where they can't really go any bigger. The current phones are already too ridiculously large. They're stuck!

Apple still has plenty of room left to maneuver when it comes to screen size, should they decide to.
Android has got nothing, besides a horrible OS.

For a change, the stars seem to be aligned in Apple's favor at the moment. AAPL is doing good, and moving up really quick. When AAPL first gets going, it's like a rocket.

This. Qualcomm won't have 64bit until early 2015, and even then it's based off ARMs A57 cores which are already behind Apples A7 cores. 16 months after the A7 and Qualcomm will still be behind. Qualcomm and Samsung must be shitting themselves every time they think about the A8.

You're right about the screen size too. Apple is the only company selling a premium smartphone without a monster screen and in a smaller form factor. It would be difficult for Samsung and others to make a compact phone and charge a premium price. For starters the processors they have to choose from (Exynos and Snapdragon) aren't as efficient as an A7. Secondly, nobody can match the processor and OS as tightly as Apple can since they control both. Put together and a compact Samsung phone would have horrible battery life due to the lack of space for a battery.

To make it even worse, Apple has pretty much bought up all the capacity for thngs like high-end CNC machines. Even if Samsung wanted to build something as precision made as an iPhone 5S they don't have the manufacturing capabilities to do so. It doesn't get much news, but Apple has been on a tear in recent years securing this type of production equipment.

On the flip side, Apple could make a larger iPhone at any time. And if they do they'll be stealing sales away from all the Android vendors who have had zero competition in this area other than each other. I could see Apple dominating in two phone categories - compact and large screened. Now just imagine the battery life on a larger device with a bigger battery and an even more efficient A8.

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post #32 of 69
Quote:
Originally Posted by Brandon Powell View Post
 

You know I always see someone in the comments saying "ultra negative, vicious analyst reports, and proclamations of doom" yet I never actually see these reports. Where are you getting your news?

 

Are you visually impaired?

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post #33 of 69
Quote:
Originally Posted by hittrj01 View Post

As amusing as the Samsung bubble bursting is to watch, calling this a quarterly loss is quite a bit of a stretch. They did still manage to make $8.2 BILLION (with a B).

Quarterly drop YoY =/= Quarterly loss

That's what I thought. I never knew Samesong's profits were as close to Apple's. Apple are such a better company with much better profits they should be crushing these guys more. I think it's time not just for one or two new iPhones, but for a slight tweaking in iPhone price points. A 16 GB 5s shouldn't be €699 in Europe. Please lower it a little bit, Apple, you'd double your market share and bolster the long term health of the platform if you did. I know myself, my sister and my mother would buy new iPhones far soon if they were just that bit more affordable.
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post #34 of 69
Quote:
Originally Posted by hittrj01 View Post
 

As amusing as the Samsung bubble bursting is to watch, calling this a quarterly loss is quite a bit of a stretch. They did still manage to make $8.2 BILLION (with a B).

 

Quarterly drop YoY =/= Quarterly loss

 

Welcome to Dilger's spinzone.   While I question the cause of the YoY decrease (-3.3%), this is still one of Samsung's most profitable quarters in their history.  But didn't we expect their sales to slow in the pre-release quarter?  II thought it was bizarre Samsung somehow managed 7 consecutive QoQ growth in 2012 and 2013. Samsung is on track to match or surpass Apple's profit in 2Q and 3Q of this year with their S5 release.


Edited by tooltalk - 4/29/14 at 12:45am
post #35 of 69
Try Yahoo Finance 4/5 days of the week if you are into negative Apple spin. Be sure to go back a week or so. They still haven't figured out how to crap in the new earnings numbers YET.
Quote:
Originally Posted by Brandon Powell View Post

You know I always see someone in the comments saying "ultra negative, vicious analyst reports, and proclamations of doom" yet I never actually see these reports. Where are you getting your news?
post #36 of 69
Quote:
Originally Posted by Bcgersh View Post

Try Yahoo Finance 4/5 days of the week if you are into negative Apple spin. Be sure to go back a week or so. They still haven't figured out how to crap in the new earnings numbers YET.

Thank you, my question was legit. It seems some people go to non tech sites to read tech news.

post #37 of 69
Quote:
Originally Posted by Brandon Powell View Post
 

Thank you, my question was legit. It seems some people go to non tech sites to read tech news.

You need to discriminate between tech news and financials about tech companies.

 

I recommend asymco.com as a good start of understanding Apple's business strategy as relates to financials.

 

As an aside, analysts have been dissing Apple regularly for not joining the race to entry level, yet Samsung has this as part of its strategy, and it looks to be very vulnerable to being assimilated from the bottom. These financials don't improve that outlook.

 

It's all about the ASP's (Average Selling Price) of the product lines, and Apple captures much more of each sale as profit.

post #38 of 69
Quote:
Originally Posted by Brandon Powell View Post
 

 

I am neither, I don't go to general news websites like abc, forbes, cnbc for my tech news. What do these sites know about tech, they aren't tech enthusiasts. Also whats wrong with my previous posts?


Don't worry, they are calling others trolls without realizing they are the ones who are trolling. Block them and ignore them.

I agree with you that most tech website actually shed a positive light on Apple products and that's deserved. But you can't just ignore the such as forbes and other terrible websites. Their 'opinions' are indeed repeated across the web and end up being know by a lot of people who think that they are legitimate arguments, when most of it are flawed interpretations or flat out lies. It's certain that a lot of stuff Apple is criticized for, is completely excused or not even talked about when it happens to others.

 

And I suggest you check out The Macalope website from time to time. He destroys stupid pundit stories each week and it's hilarious.

post #39 of 69
Quote:
Originally Posted by Apple ][ View Post
 

It's the beginning of the end!

 

It's the killing of the dinosaurs all over again...

 

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post #40 of 69
@brandon powell Does Samsung pay you a flat fee or per post?
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