LG mobile sales tank as Samsung Mobile revenues improve, but they're still below 2014's Pe...
LG blamed a "challenging quarter for mobiles" for the $117.27 million quarterly loss posted by its mobile unit, even as the company posted slightly higher year-over-year revenues across its other businesses. Samsung similarly reported strong overall earnings--primarily from its semiconductor segment--while its mobile unit turned in revenues and profits better than last year but still below its Galaxy heyday back in 2014.
LG noted "weaker than expected premium smartphone sales and increase in component costs" for its mobile segment losses, despite the release of its new G6 flagship phone.
Since 2014, Samsung has been hit hard by a series of Galaxy S flops that attracted more negative reviews than new buyers, culminating in the mobile world's worst brand implosion ever suffered in last fall's Note 7 imbroglio.
Samsung's earnings report noted that "Revenue/OP [operating profit] increased significantly driven by increased global sales of S8," but acknowledged that "shipments of mid to low-end smartphones declined."
Further, the company noted that the profit bump from the S8 introduction would be short-lived, stating that in the next quarter "earnings are projected to decline QoQ due to increased marketing costs with the launch of new Note product, and reduced new product launch effect of S8."
However, Apple has continued to maintain world-leading profitability even as it dramatically boosted its iPhone shipments numbers since the introduction of 2015's premium iPhone 6 and 6 Plus models. In contrast, Samsung has relied on shipping larger numbers of lower priced phones, a far less effective strategy for generating profits and one that has made it much easier for Chinese companies to steal away sales.
Like Samsung, Chinese brands have also achieved shipping larger numbers of phones than Apple, but none have come anywhere close to matching Apple's profitability. Last quarter, Apple's iPhone sales earned more than 5.4x as much as Samsung Mobile, and more than 15 times as much as Huawei; BBK Electronics' subsidiary brands Oppo and Vivo; Xiaomi and ZTE put together.
Apple is slated to announce its earnings for the second calendar quarter of 2017 next Tuesday, August 1.
LG noted "weaker than expected premium smartphone sales and increase in component costs" for its mobile segment losses, despite the release of its new G6 flagship phone.
Since 2014, Samsung has been hit hard by a series of Galaxy S flops that attracted more negative reviews than new buyers, culminating in the mobile world's worst brand implosion ever suffered in last fall's Note 7 imbroglio.
Samsung S8 sales to slide, middle/low tier phones already in decline
While media sources have sought to peddle the narrative that Samsung's problems are no big deal and that the company will win back the customers it literally burned with its defective batteries, the reality is that Samsung's Galaxy sales have not only failed to rebound to previous highs on the premium end but are also being hit hard by new Chinese models on the low and medium tiers.Samsung's Galaxy sales have not only failed to rebound to previous highs on the premium end but are also being hit hard by new Chinese models on the low and medium tiers
Samsung's earnings report noted that "Revenue/OP [operating profit] increased significantly driven by increased global sales of S8," but acknowledged that "shipments of mid to low-end smartphones declined."
Further, the company noted that the profit bump from the S8 introduction would be short-lived, stating that in the next quarter "earnings are projected to decline QoQ due to increased marketing costs with the launch of new Note product, and reduced new product launch effect of S8."
Samsung burned by heeding Apple Pundit advice
Apple's critics have long insisted that the iPhone-maker needed to start selling higher volumes of lower-end iPhones to compete in "market share metrics" with Chinese producers, none of whom actually make very much money producing large quantities of mid to low-end phones.However, Apple has continued to maintain world-leading profitability even as it dramatically boosted its iPhone shipments numbers since the introduction of 2015's premium iPhone 6 and 6 Plus models. In contrast, Samsung has relied on shipping larger numbers of lower priced phones, a far less effective strategy for generating profits and one that has made it much easier for Chinese companies to steal away sales.
Like Samsung, Chinese brands have also achieved shipping larger numbers of phones than Apple, but none have come anywhere close to matching Apple's profitability. Last quarter, Apple's iPhone sales earned more than 5.4x as much as Samsung Mobile, and more than 15 times as much as Huawei; BBK Electronics' subsidiary brands Oppo and Vivo; Xiaomi and ZTE put together.
Apple is slated to announce its earnings for the second calendar quarter of 2017 next Tuesday, August 1.
Comments
Hubris leads to a grab for marketshare by many participants that will drive down prices.
It will be a financial bloodbath.
for which I'm grateful.
They are saying that the S8 is the only game in town.
They ignore the fact that most of the profit growth was from the semiconductor division. To them Samsung makes phones and a few TV's but they are No 1 in phones.
Or is that just for when you're reporting on discounts on Macs? $150 off!!!
It's a shame how Apple never seems to ever dominate (in terms of market share) any market. They're always satisfied with just a piece of the highest-priced market. That always seems to make Wall Street antsy because big investors always tend to think Apple will lose even that and that will be the end of Apple. I suppose that's possible but it hasn't happened just yet. Apple keeps trying to lock in loyal consumers but anything can happen in this world. There are no guarantees at any level. Any company must keep working hard to hold onto customers at the high or low end.
The myriad software and hardware combinations make supporting apps on Android quite problematic.
Android's so-called dominance is based on notions of fallacy. It's why there is an existential crisis going on in the Android arena when it comes to supporting augmented reality/AR. Samsung is the most capable hardware manufacturer in the Android sphere, but is using Oculus for the basis of their AR efforts. Apple has released ARKit and software developers are flocking to iOS as there is a uniform base of software and hardware to work with. Unlike the Android market.
Samsung has some very compelling mobile hardware in development. And the company is going to take control of the second major mobile software platform. It is inevitable.
All one has to do is focus on what is happening in the smartwatch market. Apple is dominant, but Samsung actually builds a very nice watch also. Samsung by itself outsells all other brands of android wear smartwatches combined. They aren't getting slaughtered on the "low" end of the smartwatch market. And they have big plans for wearables along with their handsets. Where they are going, NO ONE else will be able to follow.
LG as expected, won't stay competitive. In fact, Apple is wasting money on trying to position the company as a legitimate contender in OLED panels. It will not happen. Samsung has the scale, expertise and vision that LG does not.
LG won't be alone. The Chinese manufacturers all are faced with the same problem. They are forced to pay much higher component prices than Samsung and Apple. To sell products at a loss or razor thin margins. It leaves little in the way of capital to develop new and cutting edge products. Problems that Samsung and Apple do not have.
Google can see the problem. It's why they built the Pixel. However their hardware incompetence has lead to shortages of the device and virtually no way of advancing the platform. Google and HTC had to settle for an older CPU in the Snapdragon 821 while Samsung gets the 835 for the us model and the international model gets the even better Exynos 8895. Google isn't able to source OLED panels either for future phone upgrades. LG itself isn't able to source the Snapdragon 835 either for their flagship model. The Chinese OEMs are going to find out very fast how incapable they are as the new and best AR apps are produced for Samsung/Oculus and Apple.
Even the forked versions of Android will be too "cheap." Sometimes even cheap just isn't enough.
Witness the demise of the vehicle, Yugo from the market. The same is coming to the Android platform. And even Google itself cannot change that outcome. No matter what they think and do at this point.