Samsung earnings disappoint as company blames competition in smartphone space

Posted:
in General Discussion edited August 2014
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.
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Comments

  • Reply 1 of 103
    apple ][apple ][ Posts: 9,233member

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

  • Reply 2 of 103
    dasanman69dasanman69 Posts: 13,001member
    This news should make for some interesting comments.
  • Reply 3 of 103
    chandrachandra Posts: 26member
    You can fool all or the analysts and tech bloggers some of the time ...
  • Reply 4 of 103
    lkrupplkrupp Posts: 9,139member
    But market share is everything!
  • Reply 5 of 103
    Getting my popcorn ready to watch this thread.
  • Reply 6 of 103
    disturbiadisturbia Posts: 563member

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

  • Reply 7 of 103

    Recall reading last week that Tizen is DOA.

     

    Things not looking good for Sammy....

  • Reply 8 of 103
    Same song profit start to go down as it back off on copying apple. Lol
  • Reply 9 of 103

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

  • Reply 10 of 103
    gatorguygatorguy Posts: 22,900member
    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.
  • Reply 11 of 103
    pscooter63pscooter63 Posts: 1,044member
    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?

  • Reply 12 of 103
    MacProMacPro Posts: 19,310member
    chandra wrote: »
    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 ..."
  • Reply 13 of 103
    MacProMacPro Posts: 19,310member
    gatorguy wrote: »
    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%! :D
  • Reply 14 of 103
    It's interesting, when you compete on price alone you have problems.
  • Reply 15 of 103
    macxpressmacxpress Posts: 5,158member
    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. 

  • Reply 16 of 103
    512ke512ke Posts: 782member

    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?  

  • Reply 17 of 103
    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%! image

    I am guessing 103% of the total. <img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" /> 

  • Reply 18 of 103
    MacProMacPro Posts: 19,310member
    I am guessing 103% of the total. :lol:  

    LMAO
  • Reply 19 of 103
    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!
  • Reply 20 of 103
    paulmjohnsonpaulmjohnson Posts: 1,380member

    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.

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