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Samsung earnings disappoint as company blames competition in smartphone space

post #1 of 117
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While Apple continues to see strong growth with its hot-selling lineup of smartphones, rival Samsung reported lower-than-expected earnings on Thursday, posting its smallest profit in two years.

Samsung


Samsung's net income of 6.18 trillion won, or $6 billion U.S., fell short of analyst expectations of 6.83 trillion won for the June quarter, according to Bloomberg. Income declined 18 percent, and shares of the South Korean company fell after the earnings were reported.

The Android smartphone maker has been losing ground to lower priced options from Chinese manufacturers Xiaomi Corp. and Lenovo Group Ltd.

Samsung shipped at total of 95 million handsets in the quarter, but the company does not break down how many of those were smartphones. Analyst Timothy Acuri estimated in a note to investors, a copy of which was provided to AppleInsider, that about 75 million of those were smartphones, and the remaining 20 million were low-end and mid-tier devices.

Acuri estimates that Samsung's share of the smartphone market declined a "meaningful" 500 basis points quarter to quarter, down to 25 percent. The company also shipped 8 million tablets in the three-month frame, which was considerably less than the 13 million it had shipped in the preceding quarter.

In contrast, last week Apple reported sales of 35.2 million iPhones and 13.3 million iPads in the June quarter, resulting in $7.7 billion in profit. Though the numbers fell slightly below Wall Street expectations, investors were still encouraged by the fact that iPhone shipments grew 12.7 percent from the same period a year prior.

Samsung had warned earlier this month that it would report a sales decline. The June results mark the third consecutive quarter of decreasing profits.

Samsung is Apple's chief rival in the smartphone space, as the South Korean company sells the overwhelming majority of higher-end devices running the Google Android platform. Samsung's latest flagship device, the Galaxy S5, launched during the company's June quarter, while Apple is expected to unveil its response, the highly anticipated "iPhone 6," in the coming months ahead of the fall holiday shopping season.

But Samsung is also a key supplier for Apple, most notably building all of the custom A-series processors that the Cupertino, Calif., company uses to power all of its iPhones, iPads, iPod touches and Apple TV units to date.
post #2 of 117

Good, it couldn't have happened to a more deserving company.

post #3 of 117
This news should make for some interesting comments.
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post #4 of 117

Samsung's IM division (phones,tablets,laptops) had $4.2 operating profit in operating profit in Jun Qtr.

Apple had $10.4 billion in operating profit in Jun Qtr.

 

Apple's profits is 150% greater than Samdung's IM division.

 

Sameshungs IM divisions profits are down 31% YoY

 

Remember all those analysis and media a-holes who said Shamdung was eatting Apple's lunch?

post #5 of 117

"Analyst Timothy Acuri estimated in a note to investors, a copy of which was provided to AppleInsider, that about 75 million of those were smartphones, and the remaining 20 million were low-end and mid-tier devices."

 

What a dope.  He pulled that number from the IDC report here:

 

http://thenextweb.com/insider/2014/07/30/idc-global-smartphone-shipments-hit-record-295-3m-q2-2014-samsung-apple-lost-market-share/

post #6 of 117
You can fool all or the analysts and tech bloggers some of the time ...
post #7 of 117

IF you want more detail read the report here, great for laughs:

 

http://www.samsung.com/us/aboutsamsung/ir/ireventpresentations/earningsrelease/downloads/2012/20140731_conference_eng.pdf

 

Reason for 30% profit decline for mobile division:

 

1. Amid low seasonality,Smartphone demand remained flat for QoQ

2. Lower smartphone & tablet shipments due to higher inventory level

 

LOL!

 

So they say low seasonality?  This was the first quarter for the release of their FLAGSHIP phone!  There earnings should be off the charts.

 

Higher inventory level is because they stuffed the channel on the released of the Galaxy S5 so they can say it 'sold' better than the S4 in its first month.  CLOWNS.
 

Hilarious.  Funny they mention everything except the iPhone6 for weak sales.

post #8 of 117
But market share is everything!
post #9 of 117
Getting my popcorn ready to watch this thread.
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post #10 of 117

.... Not only competition's fault but also damn Apple keeps suing our ass not to copy them!

....the lack of properly optimized apps is one of the reasons "why the experience on Android tablets is so crappy".

Tim Cook ~ The Wall Street Journal - February 7, 2014

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....the lack of properly optimized apps is one of the reasons "why the experience on Android tablets is so crappy".

Tim Cook ~ The Wall Street Journal - February 7, 2014

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post #11 of 117

Recall reading last week that Tizen is DOA.

 

Things not looking good for Sammy....

post #12 of 117
Same song profit start to go down as it back off on copying apple. Lol
post #13 of 117

Starting to sound like RIM from a few years back...

post #14 of 117

Samsung is royalty screwed.

 

This is only the beginning.  By next holiday season there profits will be down 75% from its peak in 2013

post #15 of 117
Quote:
Originally Posted by anantksundaram View Post

Recall reading last week that Tizen is DOA.

Things not looking good for Sammy....

Google is probably rooting for Apple to grab more market share than Samsung if truth be known. In fact they'll be pleased as can be when iOS gets at least 20% of the overall European market and maintains it.
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post #16 of 117
Quote:
Originally Posted by Gatorguy View Post

Google is probably rooting for Apple to grab more market share than Samsung if truth be known. In fact they'll be pleased as can be when iOS gets at least 20% of the overall European market and maintains it.

 

What, better product differentiation?

post #17 of 117
Quote:
Originally Posted by Chandra View Post

You can fool all or the analysts and tech bloggers some of the time ...

Sadly, I had to correct that... "You Scamsung can fool all of the analysts and tech bloggers some most of the time, except DED & PED ..."
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post #18 of 117
Quote:
Originally Posted by Gatorguy View Post

Google is probably rooting for Apple to grab more market share than Samsung if truth be known. In fact they'll be pleased as can be when iOS gets at least 20% of the overall European market and maintains it.

Such mixed points there. Google rooting for iOS over Android? Can you post one of your famous links for that?

Meanwhile, to the other slippery comment, Apple has by far the lions share of the profitable market share in Europe already. So your 20% figure is just market share including all the crap and therefore pointless and irrelevant.

EDIT:

In fact, after reading this article, I'm guessing Apple's % of the profitable market share must be at almost 100%! 1biggrin.gif
Edited by digitalclips - 7/31/14 at 9:04am
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post #19 of 117
It's interesting, when you compete on price alone you have problems.
post #20 of 117
Quote:
Originally Posted by Rob Bonner View Post

It's interesting, when you compete on price alone you have problems.


And when you ONLY run commercials bashing the iPhone instead of trying to convince people you're phone is better because of feature A, B, and C then people get disinterested very fast. How many iOS device commercials do you see bashing what others don't do vs what the device actually does and why its good. 

 

Of course...that would mean they'd have to do their own R&D and create some actual features instead of playing the wait and see what Apple does game. 

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post #21 of 117

Eventually the cream rises.

 

Now the Apple-bashing media will turn to Xiaomi and herald them as the next Apple-destroyer, since Samsung is being dethroned.

 

The thing is, I don't think Xiaomi is a direct threat to Apple, at least not right now.

 

People will still pay a premium for Apple's awesome stuff.  People won't pay a premium for Samsung's stuff when they can get a Xiaomi that's just as good and nearly identical.

 

My question is, if Sammy keeps falling, is there going to be a premium Android brand that truly sells?  

post #22 of 117
Quote:
Originally Posted by digitalclips View Post

In fact, after reading this article, I'm guessing Apple's % of the profitable market share must be at almost 100%! 1biggrin.gif

I am guessing 103% of the total. :lol: 

post #23 of 117
Quote:
Originally Posted by anantksundaram View Post

I am guessing 103% of the total. lol.gif  

LMAO
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post #24 of 117
I've shared before, I take great pleasure in steering people away from buying Scamsung's products, e.g., informing my in-laws about Scamsung's total lack of ethics, which resulted in them changing their minds and buying an LG washer and dryer set, instead of the Scamsung models they were prepared to purchase. Did this hurt Scamsung much? No...BUT I sure felt good knowing I was making a difference, even if a small one.

Scamsung, may your bilges fill with putrid waters, may your sails rip to shreds, and may Steve Ballmer (or someone with his qualities) man the helm.

Bon voyage!
post #25 of 117

The Daily Telegraph in England made some interesting points about this today.  They said that ultimately as smartphones cease to be differentiated by hardware, and they made the point that once, for examples, screens become such high resolution that your eye can't discern an even higher resolution, people will end up buying phones based on:

 

  1. Familiarity
  2. Price

 

Familiarity is a function of the OS, so if you're into iOS, you will continue buying Apple, but if you're into Android, you can easily move from Samsung to someone else, and that someone else can easily be someone with lower price.

 

As the market matures, Apple are going to be ever more the only company in the space that makes any profit out of phones.

post #26 of 117
Hold off on releasing the iPhone 6 for a year and Samsung will go bankrupt because they have nothing to copy.

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post #27 of 117
Quote:
Originally Posted by macxpress View Post


And when you ONLY run commercials bashing the iPhone instead of trying to convince people you're phone is better because of feature A, B, and C then people get disinterested very fast. How many iOS device commercials do you see bashing what others don't do vs what the device actually does and why its good. 

Of course...that would mean they'd have to do their own R&D and create some actual features instead of playing the wait and see what Apple does game. 

There is all that ... plus once you use one the horrible truth sinks in ... I bet many iPhone sales (and a few iPads sales) are switchers from Android crap. I say' a few 'iPads sales' as the sale of Android tablets is hardly registering on the charts (excluding channel stuffing data from Scammy and Gatorguys collection). 1biggrin.gif
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post #28 of 117
Quote:
Originally Posted by PaulMJohnson View Post

The Daily Telegraph in England made some interesting points about this today.  They said that ultimately as smartphones cease to be differentiated by hardware, and they made the point that once, for examples, screens become such high resolution that your eye can't discern an even higher resolution, people will end up buying phones based on:
  1. Familiarity
  2. Price

Familiarity is a function of the OS, so if you're into iOS, you will continue buying Apple, but if you're into Android, you can easily move from Samsung to someone else, and that someone else can easily be someone with lower price.

As the market matures, Apple are going to be ever more the only company in the space that makes any profit out of phones.

Agreed but I'd add that those with no problem dropping Android, many that are higher educated and better off will be going iOS, i.e. higher priced.
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post #29 of 117
samsung down 4.46% after the close. are they going to drag down aapl for the day? aapl is presently down 2.74%.
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post #30 of 117
Quote:
Originally Posted by Digitalclips View Post

So your 20% figure is just market share including all the crap and therefore pointless and irrelevant.

On the contrary it's VERY relevant if Apple has 20% of the EU market share. Yes I'll almost guarantee Google is rooting for Apple to make an even better showing in Europe than they do now. It keeps Almunia and his soon-to-be-replacement off their back.
Edited by Gatorguy - 8/1/14 at 3:59am
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post #31 of 117
Quote:
Originally Posted by SpamSandwich View Post

Hold off on releasing the iPhone 6 for a year and Samsung will go bankrupt because they have nothing to copy.

 

$6 billion in profit is not exactly "going bankrupt", I think.  Besides, healthy competition is good for both Samsung and Apple.  If only Samsung would shift it's business model from imitation to innovation!

 

Seinfeld, 1989

 

Samsung, 1993

post #32 of 117

I think the main reason for this result is that Samsung miscalculated badly with the S5.  It was bland and boring in appearance and just too much like the S4.  They were to complacent and too conservative. They goofed with staying with plastics for the body.  Pretty much every model in the entire Nokia range has a more pleasing design and most of it's Android competitors look better.

 

The upper echelons at Samsung seem to lack courage and vision.  If they don't do something about that they are going to sink way back in sales.

post #33 of 117
Quote:
Originally Posted by Apple ][ View Post
 

Good, it couldn't have happened to a more deserving company.

 

**** you, Samsung - the worse the better.

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post #34 of 117
It is pretty clear now to even blogger and analysts that the big threat from China will be to Android premium sales companies SAMSUNG, LG, HTC, etc versus Apple. On the high end, SAMSUNG faces Apple iPhone line up and this market is not a commodity. Compounding the problem is Google putting pressure on Samsung to not develop Tizen nor create a differentiated Android phone.

SAMSUNG's "Sony" strategy to copy and undercut prices has not been as effective as they hoped and therefore requires them to address three big problems:

1. How to handle the low cost phones from Chinese manufacturers?
2. How to truly innovate in hardware and software as well as business strategy versus copying Apple?
3. How to get out from under the thumb of Google?

This last one is the most important to address, otherwise they end up like their PC brethren with very low prices and near zero margins while Google (or Microsoft for PCs) suck all the profit out of the air.
post #35 of 117

So, despite the phablet fad sales remained flat … ??

 

One more thing: How much did they earn producing retina screens for Apple?

 

post #36 of 117
Quote:
Originally Posted by digitalclips View Post


Such mixed points there. Google rooting for iOS over Android? Can you post one of your famous links for that?

Meanwhile, to the other slippery comment, Apple has by far the lions share of the profitable market share in Europe already. So your 20% figure is just market share including all the crap and therefore pointless and irrelevant.

EDIT:

In fact, after reading this article, I'm guessing Apple's % of the profitable market share must be at almost 100%! 1biggrin.gif

You're missing the point. Google doesn't want the EU to treat it like a monopoly, meaning that it's in its own best interest for Apple to have about a 20% piece of the pie in Europe.

post #37 of 117

Maybe things will look up for Samsung now that the Oculus Rift DK2 is using the Galaxy Note 3 parts! Gotta use the excess phones somehow.

post #38 of 117
To paraphrase Drexl from True Romance
"they musta thought it was Samsung day.... it ain't Samsung day, is it?"

Minion "no man it ain't Samsung day"
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post #39 of 117
Quote:
Originally Posted by cnocbui View Post
 

I think the main reason for this result is that Samsung miscalculated badly with the S5.  It was bland and boring in appearance and just too much like the S4.  They were to complacent and too conservative. They goofed with staying with plastics for the body.  Pretty much every model in the entire Nokia range has a more pleasing design and most of it's Android competitors look better.

 

The upper echelons at Samsung seem to lack courage and vision.  If they don't do something about that they are going to sink way back in sales.

 

Samsung had bad results and the future looks bleaker.  I really don't know that Samsung could have done much better by adding more bells and whistles.  Metal backs wouldn't help them a whole lot, it hasn't helped HTC.  Xiaomi and Lenovo can do the same for less money and will eat share and profitability.

 

Apple is in a good spot.  Their fans love them, and they still have low hanging fruit to add to their offerings...  Basically a larger screen and widgets.  Those two things are going to make the iPhone a radical improvement and substantial change over prior offerings and are going to make the iPhone 6 a blockbuster.

post #40 of 117
<<Points at Sammy and Nelson-laughs. >>

Wait, I thought increased competition is bad for only Apple.
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