Samsung is having something of a bad time right now. Having already announced three consecutive quarterly drop in profits, the South Korean firm has announced that it expects a decline in profit of almost 60% for the third quarter of 2014 after having already warned that the second half of the year would ‘remain a challenge.’
It looks like that may have been an understatement.
Coming before its full earnings report later this month, this news sets the tone for what is expected to be a dire showing for the firm that was once riding the crest of a rather large wave. Samsung announced that it expects to post an operating profit of $3.8 billion, or 4.1 trillion won for the quarter that came to a close at the end of September, which while nothing to sniff at is a considerable departure from the norm – a 59.7% drop on the same period from last year.
The firm also announced that it expects its quarterly sales to plummet by 20%, with stiff competition at the low end coming from the likes of Xiaomi and Huawei eating into Samsung’s sales at one end of the market and Apple’s high-end new iPhones attacking Samsung from above. Samsung’s smartphone operations are in danger of going into freefall, though it’s still too early to be panicking. Known for its lavish advertising spending, it wouldn’t take Samsung too long to find some corners that could be cut should the need arise.
Even so, Samsung and its shareholders will be hoping that the steep decline is arrested sooner rather than later, and with the flagship Galaxy Note 4 just beginning to roll out the door, the massive phone will have plenty of hopes pinned on it.