Samsung profits decline 8 percent over last year, meaning the Galaxy S6 didn't solve the company's ongoing woes.
Even after Samsung’s (KRX:005930) big unveiling of the Galaxy S6, a phone expected to turn around profits for the Korean electronics giant, the company suffered another downward trend in its latest earnings report.
While the company’s overall earnings drop only reached 8 percent for the April-June quarter, the mobile division suffered a staggering 38 percent decline. The sharp drop came very unexpectedly, coming right on the heels of the company’s double flagship smartphone launch: the Galaxy S6, and Galaxy S6 Edge.
Even though 38 percent seems high, it is still significantly less than the previous quarter’s 60 percent plunge, it only served to increase the decline period of the mobile division. It is believed that the company’s pains are the result of Apple, which launched several larger iPhone models, luring customers away from Samsung. It also is losing the low cost mobile market to Chinese competitors.
Samsung saw a net income of KRW 5.8 trillion (4.9 million USD) for the April-June quarter, an 8 percent decline from KRW 6.3 (5.5 million USD) trillion a year before.
However, it wasn’t all bad news for Samsung. The company saw its semiconductor division rise past KRW 3 trillion in profit for the first time in several years. This rise helped soften the lowly performance of the company’s other divisions.
In April, the company had hoped that its Galaxy S6 and S6 Edge phones would be the ray of hope that the company needed to recover from its downturn. Part of the problem with these phones is that Samsung misjudged their popularity; the regular model wasn’t as popular as expected, while the S6 Edge model was continually out of stock. The S6 Edge’s screen, which is curved around both sides, is more costly to produce.
Market research firm IDC said that Samsung, although still the world’s largest maker of smartphones, was remarkably the only top five vendor to see a loss of market share, losing 3 percent points, putting it at 22 percent.
Executives didn’t give many hints about what might be in store for the company, or any future goals to turn around its troubles. The only possible hint was the mention of the strategy to “innovate the hardware to lead the market in the premium segment” and to “continue to add services.”
On August 13th, the company will be holding its next project launch event in New York City, moving its schedule ahead by one month from September of previous years. The event will likely launch two new mobile devices.
No comments:
Post a Comment