Samsung Profits Fall 58% Amidst Competition From iPhone 6, Low-End Smartphones

Samsung Profits Fall 58% Amidst Competition From iPhone 6, Low-End Smartphones

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Samsung revealed that its third-quarter operating profit likely fell 58% to 62% from a year earlier, reports the WSJ. That's even worse than the low end expectations of analysts and the fourth quarter in a row with declining operating profit.

Samsung said that smartphone shipments "increased marginally"; however, profit margins declined due to lower prices and higher marketing expenses.

The company is facing increased competition at the high-end from the new Apple iPhone 6 and iPhone 6 Plus which have larger screens, previously a distinguishing feature for its devices. The company is also facing intense competition at the low-end from Chinese handset makers.

Samsung's third quarter included just twelve days of iPhone 6 sales and analysts expect the impact of the new Apple smartphones to be even larger in the fourth quarter.

Nomura analyst C.W. Chung says that without essential differentiators like Apple's design cachet and a software ecosystem, Samsung is headed toward becoming a maker of commoditized hardware. Chung predicts that its operating margins for handsets and tablets will decline to 11% in 2016 from 21% in 2013.

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Samsung Profits Fall 58% Amidst Competition From iPhone 6, Low-End Smartphones

Marc - October 10, 2014 at 11:09am
They could always fall back on their washing machine business?
Lolwut - October 13, 2014 at 10:11am
As much as their TV has done great (not the 'smart' TV) vizio I find better and perfect.
Samsucky - October 9, 2014 at 1:42am
Hahahahhaba now get back to the basement and do what apple tells you to do or we will cut the rest of your profits and shit can your sorry ass . Parts maker , make parts chop , chop. Hahahahahah . You sambuttsucksrs I hate it for you . You lose
NotFanBoi - October 8, 2014 at 5:51pm
I love how people who know NOTHING about manufacturing processes, claim that Apple products use superior components, and superior manufacturing techniques, and are just plain better. Say whatever makes you feel better about the higher price you paid. Fact: HALF of the components Apple uses in iDevices are made by Samsung. If you say Samsung sucks, then you are saying Apple builds with crappy parts - which makes them no better than Samsung. Any parts/components NOT made by Apple themselves are not made at higher quality than those manufacturers would make for everybody else. (Or else the iDevice would cost double what it does!) Apple buys parts from the same places as every other electronics manufacturer, and assembles them at often the same places (in China) as other manufacturers/competitors do. How does that make Apple's products better?
Marc - October 8, 2014 at 10:40pm
Look sonny, firstly it's not close to half the parts, secondly Samsung is good and making certain components. They have decent phones, but they obviously don't have ios, the ecosystem, and same design class, a mature marketing, lack of exceptional business sense, hence the loss in significant market share and profits - drop prices to keep market share but lose market share anyway?, and an apple badge they're renting from android a generic open source product hired to other OEMs. Two words: Samsung is nothing special(I'm yet to see a Q of note outside their stores, that's why they'll eventually only be good enough for component making
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