LG mobile sales tank as Samsung Mobile revenues improve, but they're still below 2014's Pe...

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in iPhone
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 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.
lostkiwilolliver

Comments

  • Reply 1 of 11
    tmaytmay Posts: 3,662member
    Commodity Android OS devices are flooding into a buyers market with little real differentiation. 

    Hubris leads to a grab for marketshare by many participants that will drive down prices.

     It will be a financial bloodbath.


    macky the mackycalironnwatto_cobracornchip
  • Reply 2 of 11
    There's no love for Samsung...
    for which I'm grateful.
    lolliverronnwatto_cobrapeterhart
  • Reply 3 of 11
    calicali Posts: 3,495member
    I'd love to see the knockoff manufacturers tumble one by one. 
    lolliverronnwatto_cobra
  • Reply 4 of 11
    jony0jony0 Posts: 269member
    "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, and of course because of the yearly new iPhone launch that always clobbers us."
    Fixed that for ya.
    lolliverronnwatto_cobracornchip
  • Reply 5 of 11
    sflocalsflocal Posts: 4,547member
    cali said:
    I'd love to see the knockoff manufacturers tumble one by one. 
    The do tumble.  They're like weeds.  When one iKnockoff shop goes bust, another one sprouts up.  So long as there's barely a dollar to be made selling junk phones, they'll be some seedy shop to take the breadcrumbs.

    watto_cobra
  • Reply 6 of 11
    Yet, the parts of the press that love Samsung keep on telling a different story.
    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.

    edited July 2017 watto_cobra
  • Reply 7 of 11
    Um, if it wouldn't trouble you too much, maybe provide some numbers with the article???

    Or is that just for when you're reporting on discounts on Macs?  $150 off!!!
    mknelson
  • Reply 8 of 11
    The greedy big investors only get excited when a company is dominating in market share percentage. That's why they love Amazon so much. I think the reason is that if market share percentage gets high enough it can put other companies completely out of business. Investors go giddy when they think that's going to happen. Wall Street seems quite happy that Android has such a domination in smartphone market share percentage. They believe Apple is going to go out of business because iPhone market share is shrinking. That has to be the reason for investor "concerns" with Apple. In the case of China's market, I think that Chinese consumers are simply being loyal to their own domestic brands. It's not because they don't like Apple products. If it is due to loyalty to local brands, I think that's admirable of Chinese consumers.

    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.
    edited July 2017
  • Reply 9 of 11
    cali said:
    I'd love to see the knockoff manufacturers tumble one by one. 
    You do realize that won't happen.  If it hasn't happened by now, it never will.  There will always be manufacturers who believe they can do what others fail to do.  I think that's just human nature.  The companies who make cheap knockoffs will never go away.  They understand how consumers think.  Consumers love cheap stuff even if it's junk.  They always think they're getting some wonderful bargain.  Google has said they want manufacturers to make cheaper and cheaper smartphones so everyone on the planet can own one and use Google services.  That's why Android market share is still climbing and iPhone market share is shrinking.  I assure you the cheap knockoffs will forever hinder iPhone sales no matter how well Apple builds iPhones.  Quality means nothing to most people.  It's all about getting something as cheap as possible.
  • Reply 10 of 11
    Um, if it wouldn't trouble you too much, maybe provide some numbers with the article???

    Or is that just for when you're reporting on discounts on Macs?  $150 off!!!
    A bit snarky...but I take your point. Made me smile.  :)
    edited July 2017 cornchip
  • Reply 11 of 11
    Herbivore2Herbivore2 Posts: 362member
    cali said:
    I'd love to see the knockoff manufacturers tumble one by one. 
    You do realize that won't happen.  If it hasn't happened by now, it never will.  There will always be manufacturers who believe they can do what others fail to do.  I think that's just human nature.  The companies who make cheap knockoffs will never go away.  They understand how consumers think.  Consumers love cheap stuff even if it's junk.  They always think they're getting some wonderful bargain.  Google has said they want manufacturers to make cheaper and cheaper smartphones so everyone on the planet can own one and use Google services.  That's why Android market share is still climbing and iPhone market share is shrinking.  I assure you the cheap knockoffs will forever hinder iPhone sales no matter how well Apple builds iPhones.  Quality means nothing to most people.  It's all about getting something as cheap as possible.
    Except that Google services are not available in China and never will be. The Chinese market uses forked versions of Android which, though included in Android marketshare, aren't really the same OS.  

    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. 


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