Weak Quarter for Samsung Invites Competition from Apple

Published Date : Jan 29, 2015

Samsung Electronics Co. Ltd. is now one step closer to losing its lead in the global smartphone market after it showed a disappointing drop in the quarterly earnings in the mobile sector on Thursday. Their news comes exactly one day after Apple Inc., Samsung’s biggest rival, revealed that they experienced the largest profit in corporate history.

The South Korean electronics giant reported that earnings from smartphones and their other mobile gadgets fell 64 per cent per year in the October to December quarter. The final tally was US$1.80 billion, which is regarded as the company’s first annual earnings drop since the past three years.

The company’s mobile division experienced its fifth quarter of decline, while Apple broke records with 74.5 million iPhone sales within the final quarter’s three months up to December 27. The sales showed a hugely positive response from consumers for the Apple iPhone 6 and the Apple iPhone 6 Plus.

The pressure has mounted on Samsung, according to analysts, to try and retain its market share. The company now pins its hopes on to the launch of its next flagship, the Samsung Galaxy S6. The new phone is expected to be release in March 2015.

An analyst from Maybank Kim, Warran Lau, said that it can be expected from Samsung to bring forth substantial improvements in terms of specs, build quality, and design. The question, however, is whether the effort will be adequate.

Last year, the mobile earnings of Samsung operating profit had fallen to 58 per cent, from the nearly 70 per cent in 2013.

Expectations from Samsung include faster shipments and average selling prices for their handset sales to pick up in the early quarter of 2015. They plan to achieve that through the Samsung Galaxy A.