Samsung earnings disappoint as company blames competition in smartphone space
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'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.
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.
Comments
Good, it couldn't have happened to a more deserving company.
.... Not only competition's fault but also damn Apple keeps suing our ass not to copy them!
Recall reading last week that Tizen is DOA.
Things not looking good for Sammy....
Starting to sound like RIM from a few years back...
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.
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?
Sadly, I had to correct that... "
YouScamsung can fool all of the analysts and tech bloggerssomemost of the time, except DED & PED ..."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%!
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.
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?
In fact, after reading this article, I'm guessing Apple's % of the profitable market share must be at almost 100%!
I am guessing 103% of the total.
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LMAO
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!
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:
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.