Samsung’s Profits Dip 74%; Low Cost Chinese Phones And Strong iPhone 6 Sales To Blame
Samsung had already warned that it wasn’t going to be announcing stellar profits this quarter, but having now announced the figures themselves it’s clear that things aren’t going according to plan for the company that was once basically printing money with each new Galaxy S smartphone release.
For the quarter that ended in September, Samsung reported a net profit of $4 billion from an income of $1.66 billion. Samsung’s mobile profits have dropped an alarming 74% for the quarter, which is apparently down to the fact that fewer people bought the Galaxy S5 following its April release than the company expected. Conventional wisdom is that too many Samsung customers held back to see what Apple would announce following rumors of larger iPhones in the offing. That obviously turned out to be accurate with the iPhone 6 and iPhone 6 Plus releases.
On the positive side, Samsung does expect its profits to rise for the current quarter, though it’s believed that the improvement in results will come from its memory division rather than the one responsible for mobile technology.
While nobody is saying that Samsung is doomed, there can be little doubt that it is in the midst of a downward spiral that it will want to arrest sooner rather than later. With strong competition coming not just from Apple but also emerging companies like Xiaomi, Samsung’s old formula doesn’t appear to be working this time around.
Samsung is at least trying to change things. The Galaxy Alpha and Galaxy Note 4 are both lovely devices to look at and have the same premium feel that HTC and Apple have been able to offer for a while now. Using metal instead of plastic in its phones may not be a miracle cure to all of Samsung’s ills, but it does show a willingness to change, and that’s more than can usually be said for the company.
Something tells us that the Galaxy S6 is going to be a big, big release for Samsung. And it really has to be, after all, its competing terms just got a huge boost from its rivals in all four directions.
Let’s just wait and see what Samsung has in store for us!