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Samsung profit’s decline drastically

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Samsung Electronics has reported an expected 60% decline in quarterly operation profits this year.

Profits between July and September are the lowest in more than three years due to the high-end Samsung Galaxy becoming less popular in recent months.

Intense competition in the smartphone sector has massively hit the tech giant, with the launch of the iPhone 6 from Apple Inc dominating headlines over the past month. Samsung said the median forecast of July-September operating income was £3.8 billion, way below the analyst’s expectation.

Analysts and investors also believe the best days are behind Samsung’s mobile division as it will need to sacrifice margins to keep cheaper Chinese handsets from grabbing more of their customers.

The South Korean group said ‘The operating margin declined due to increased marketing expenditure and lowered average selling price.’

“It appears that Samsung has been cutting prices to maintain market share, but has lost market share anyway,” said Richard Windsor, a former Nomura analyst who runs the Radio Free Mobile blog.

“If market share continues to fall, Samsung will come closer to joining the long-suffering ranks of every other Android handset maker,” he added, referring to the Google operating system on which Samsung heavily relies on.

However Samsung are hopeful that Christmas will help to boost profits. Samsung will publish full financial results later this month.

Published on Wednesday 08 October by Editorial Assistant
Tags: phones

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