Samsung’s profits fall as cheaper smartphones gain market share

Samsung-LogoLast Friday tech giant Samsung Electronics hit the market with its ultimate creature. The Galaxy S5 was released worldwide, in more than 100 countries. Samsung said there was high demand for its latest flagship smartphone in many countries across the globe such as France, India and Canada, reporting that there were long queues for the device, way before the shops’ opening. Moreover, the Korean giant is pretty confident that the peculiarities of the S5 – like being sand and water resistant – will guarantee success in areas like Middle East.

That’s pretty interesting, although there’s no real report of long queues in front of the shopping malls and it’s quite tough to verify the general demand. On top of that, the Galaxy S5 – which received positive review also gathering general consensus that it lacks real innovation at the same time – was priced lower at its commercial launch than the previous S4 model. And this is definitely not accidental.

Three days before launching the S5 the electronics company announced it was facing a second consecutive quarter of profit decline. The company estimated its first quarter operating profit at 8.4 trillion Korean WON (€ 5.76 billion) – a 4.3 percent fall – marking a second straight year-on-year decline. Sales are flat at 53 trillion Korean WON. No doubt that the S5’s price lowered is a sign, not yet a symbol, of the challenge that the company faces.

The smartphones sector is shifting to mass-market, this is the knot, as high-end growth eases off with sales slowing in mature markets. Smartphone sales growth is slowing down in North America, Europe, South Korea and Japan, while consumers in developing nations tend to buy cheaper devices. Huawei, Lenovo and Xiami are expanding in Southeast Asia and China, and consequently they are forcing down prices. Market research and analysis firm IDC estimated the average selling price of smartphones will fall to € 192 globally by 2017 from € 244 in 2013 and € 280 in 2012, generally speaking. The average price of a Samsung smartphone this year will likely be € 199, down 9 per cent from 2013, according to analysts at Nomura Financial Investment, as reported by the Times Colonist recently. Declining prices of smartphones also puts pressure on profit margins for micro components which are complementary to mobile devices, such as memory cards and display panels, which are all key products made by Samsung.

Samsung is attempting to cut costs in response to its business challenges, and this would have been unthinkable even 12 months ago. The Korean giant, the world’s largest smartphone maker, has cut back on marketing to save money. “This strategy gives them price competitiveness that can be leveraged to drive sales volume and defend overall profits,” IM Investment analyst Lee Min-Hee said, as reported by Reuters.

Many see wearable devices such as smartwatches or glasses as the next key of success in an incredibly saturated market. However, Samsung’s first internet-enabled smartwatch series, which was introduced last September, was greeted coldly by consumers. Analysts believe that, given its enormous economic potential, the tech giant will likely invest billions in this segment anyway.

No doubts that this is going to be a very challenging year for the Korean company, as also a patent trial was opened in the United States last week, with arch-rival Apple vowing to prove that Samsung copied their iPhone features and should pay more than $2 billion (€ 1.45 billion) in damages.

Most analysts expect Samsung’s earnings to improve in the current quarter anyway, and the Korean multinational company to get back on track very soon.

The Seoul-headquartered company is the world’s largest maker of smartphones, televisions and memory chips. Samsung made more than 30% of all smartphones sold in the world last year, nearly twice the share of Apple.

Follow @carlomotta_ on Twitter

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

ECOFIN Council. Michel Barnier, Member of the European Commission, Vitor Constancio, Vice-President of the European Central Bank, (from left to right). The central banker may look timid before the French showman but he clarified that the ECB needs clear-cut procedures. (Council of the European Union, 18/12/2013).

Eurozone close to agreeing on a Banking Union

COP21 Paris: The Final Agreement Adopted-full text

The German Federal Minister of Finance, Wolfgang Schäuble (German Federal Ministry of Finance photographic library).

When is Berlin telling the truth about the EU banking union?

Daniela Runchi JADE President

A Sting Exclusive: “Junior Enterprises themselves carry out projects focusing on the environment”, JADE President Daniela Runchi highlights from Brussels

DAVOS/SWITZERLAND, 19JAN16 - View of the Congress Center with the different flags of participating countries ahead of the Annual Meeting 2016 of the World Economic Forum in Davos, Switzerland, January 19, 2016.

  WORLD ECONOMIC FORUM/swiss-image.ch/Photo Michael Buholzer

WEF Davos 2016 LIVE: “CO2 is not the problem, it is the symptom”, the pilots who crossed the world using solar energy cry out from Davos

Olli Rehn, Vice-President of the EC in charge of Economic and Monetary Affairs and the Euro (on the left), received Andris Vilks, Latvian Minister for Finance. (EC Audiovisual Services).

Eurozone examines the prospect of issuing debt paper jointly

_alexandru_dragos

Breaking barriers between youth in the new tech era: is there an easy way through?

Ms. Rachel Bruls is a medical student at the University of Amsterdam and Regional Assistant for
 Medical Education in Europe for the IFMSA

On Youth Education: “Just a normal day in the life of a medical student”

Arif Shala is a doctoral student at the Ludwig Maximilians University in Munich, Germany and executive director at the Institute for Economic Development Studies in Prishtine, Kosovo.

Why education and accountability are important for developing countries?

Ambassador Yang Yanyi Chinese Mission to EU

A Sting Exclusive: “China is Making Good Stories not Bad Ones”, Ambassador Yang highlights from Brussels

Mr David CAMERON, UK Prime Minister.
Shoot location: Brussels - BELGIUM
Shoot date: 28/06/2016
Copyright: No commercial use. Credit 'The European Union'

EU revengefully shows no mercy to Cameron by demanding a fast and sloppy Brexit now

European Parliament. Committee on Civil Liberties, Justice and Home Affairs (LIBE) and Committee on Economic and Monetary Affairs (ECON) joint meeting. (EP Audiovisual Services, 20/2/2014).

EU Parliament: No EU-US trade agreement without safe data

Richard Bruton, Irish Minister for Jobs, Enterprise and Innovation and President of the Council, sitting in the middle, with EU Ministers participating in the signature ceremony and Commissioner Michel Barnier (standing second from right, front row). (EC Audiovisual Services).

The EU patent space and Unified Court are born

JADE_JEN

Youth Entrepreneurship Issue of the month: JEN, organisers of JADE October Meeting, on why JEs should come together

World Retail Congress Logo___

Worldwide consumer confidence has shot up to its highest level for four years according to a survey of 130 Global Retail leaders

José Manuel Barroso, President of the European Commission, went to Sintra, in the Grande Lisboa subregion (Lisbon Region) of Portugal, where he participated in the European Central Bank (ECB) Forum on Central Banking (in the foreground, from left to right). (EC Audiovisual Services).

ECB’s unconventional monetary measures give first tangible results

Press conference by Tonio Borg, Member of the European Commission on the legislative package on animal and plant health, reassuring us for everything (EC Audiovisual Services, 06/05/2013).

Commission: Do it like the Americans in the food sector

Arrival and doorstep by Boris Johnson, Foreign Secretary of the United Kingdom, at the Foreign Affairs Council on 17 October 2016 in Luxembourg. (Snapshot from a video. Location: Luxembourg, Luxembourg. European Council – Council of the European Union Audiovisual Services).

Solitary Britain sides with US aggressing Russia and chooses hard Brexit

The tenth meeting of European Religions in Brussels. Bhai Sahib Mohinder Singh, Chairman of the Guru Nanak Nishkam Sewak Jatha, 1st, Syed Ali Abbas, Joint Secretary of Majlis-e-Ulama-e-Shi’a Europe, 2nd, Reinhard Marx, Archbishop of Munich and Freising; President of the Commission of the Bishops' Conferences of the European Community (Comece), 3rd, holding a microphone, and Christopher Hill, Bishop of Guilford and President of the Conference of European Churches (CEC), 5th (from left to right). (EC Audiovisual Services, 10/06/2014).

Why and how did ISIS and Muslim fundamentalism gain momentum this year?

Refugees: the Balkan route starts from the Greek island of Lesbos. A series of EC Audiovisual Services’ stockshots show refugees arriving in Greece and their route through the Balkan countries into EU member states further north. Shoot date: 11/09/2015. Location: Lesbos, Greece. (EC Audiovisual Services. Snapshot from a video footage).

Migration has set EU’s political clock ticking; the stagnating economy cannot help it and Turkey doesn’t cooperate

European Central Bank President Mario Draghi (in the foreground) attends a plenary session of the European Parliament in Strasbourg. (EP Audiovisual Services).

ECB should offer more and cheaper liquidity if Eurozone is to avoid recession

"You got to look for some more money to chip in my Investment Fund", Mr Juncker would be probably saying here to Francois Hollande. From left to right,  Jean-Claude Juncker, President of the European Commission and Francois Hollande, President of France in a meeting in Spain earlier this month (EC Audiovisual Services, 04/03/2015).

Juncker’s Investment Plan in desperate need for trust and funds from public and private investors

Mario Draghi walks to take his position in ECB’s Press Conference room. (ECB Audiovisual Services, 22/1/1015).

ECB’s €1.14 trillion again unifies Eurozone; Germany approves sovereign debt risks to be pooled

Joaquín Almunia, Vice-President of the EC in charge of Competition, gave a press conference yesterday on several decisions on State aids, adopted on the same day by the European Commission. He is obviously perplexed with his own decisions. (EC Audiovisual Services, 18/12/2013).

Fair completion rules and the law of gravity don’t apply to banks

In the sidelines of Sunday’s Eurosummit the Greek Prime Minister Alexis Tsipras met with the German Chancellor Angela Merkel, the EU Commission President Jean-Claude Juncker and the French President Francois Hollande. (EC Audiovisual Services, Date: 07/07/2015).

Tsipras bewildered with Berlin’s humiliating demands; ECB expects political sign to refinance the Greek banks

ECOFIN Council of 15/11/2013. From left to right: Anders Borg, Swedish Minister for Finance and Wolfgang Schauble, German Federal Minister for Finance. (Council of the European Union photographic library).

Eurozone guarantees all banks with…taxpayers’ money

Visit by Dimitris Avramopoulos, Member of the EC in charge of Migration, Home Affairs and Citizenship to Austria. Dimitris Avramopoulos visits a medical station at the refugee camp in Traiskirchen.

EU migrant crisis: Germany, France and UK to show the way. Will the rest of the EU follow?

Federica Mogherini, High Representative of the Union for Foreign Affairs and Security Policy and Vice-President of the EC, went to Washington where she participated in an International Leaders Forum on "The Transatlantic Bond in an Age of Complexity" at Brookings Institution. The event, moderated by Karen Donfried, President of the German Marshall Fund of the United States (GMF), was jointly organised by the Center on the United States and Europe (CUSE) of Brookings Institution and the GMF. The Vice-President then met with Madeleine Albright, Chair of Albright Stonebridge Group. Who says that the old ghosts don’t haunt today’s skies. The day after Federica Mogherini (on the left) met with Michael Froman, US Trade Representative. The specter of Transatlantic Trade and Investment Partnership (TTIP) must have been present. Again the old phantoms are present in today’s business. (EC Audiovisual Services, 21/01/2015).

‘Internal security’ or how to compromise citizens’ rights and also make huge profits

European Youth Forum

European welfare states are failing young people

European Central Bank. Main building in Frankfurt am Main, Germany, illuminated. (Work of ECB Audiovisual Services).

Trailing the US-EU economic confrontation

Angela Merkel, German Federal Chancellor, Horst Seehofer, Minister-President of the Land of Bavaria, Gloria, Princess of Thurn and Taxis, Johannes Hahn, Member of the EC in charge of Regional Policy, Emilia Müller, Bavarian Minister for Federal and European Affairs, and Hans Schaidinger, Mayor of Regensburg (from left to right). At the 1st Annual Forum of the EU Strategy for the Danube Region. (EC Audiovisual Services).

Germany loses leading export place

Johannes Hahn, Member of the EC in charge of Regional Policy, fourth from left, visited the Pompeii site in Campania Region, Italy, where the European Union has co-financed a rehabilitation project. (EC Audiovisual Services).

Italian voters put again the European Peoples in the Brussels picture

Theresa May at World Economic Forum 2017 in Davos (World Economic Forum, 2017)

Theresa May’s global Britain against Philip Hammond’s Brexit fog

UNCTAD Trade and Development Board, (UNCTAD Photographic library).

Is the West gradually losing Africa?

Eurogroup meeting of 20/02/2015. Mario Draghi, President of the European Central Bank (ECB), and Pierre Moscovici Member of the EC in charge of Economic and Financial Affairs, Taxation and Customs (in the foreground, from left to right), participated in that crucial meeting with the 19 of Eurozone Ministers for Finance. They all agreed to consider extending financial assistance to Greece, which was formally known as the Master Financial Assistance Facility Agreement, granted by the European Financial Stability Facility (EFSF). Discussions took place in the context of the expiry of the financial assistance to Greece due on 28/02/2015. (EC Audiovisual Services).

Greece at the mercy of ECB while sailing through uncharted waters

Discussion between Angela Merkel, German Federal Chancellor and José Manuel Barroso President of the European Commission, (in the foreground, from left to right). (EC Audiovisual Services).

Convincing the Germans to pay also for the unification of Eurozone

european-youth-forum-logo

European Youth Forum welcomes the European Commission’s proposed revision of the Union Code on Visas, however it does not go far enough

Mrs Monique Goyens is the Director General of BEUC (Photo: Pablo Garrigos)

A Sting Exclusive: “One year on from the VW scandal and EU consumers are still in the dark”, BEUC’s Head highlights from Brussels

Conference organised by the JRC "Scientific Support to EU Growth and Jobs: Efficient buildings, vehicles and equipment", followed by the 2013 Greenlight Awards Ceremony. Máire Geoghegan-Quinn, Member of the EC in charge of Research, Innovation and Science in the podium. (EC Audiovisual Services).

Eurozone recession subsides

Francois Hollande, on the left and José Manuel Barroso (EC Audiovisual Services). The French President as a good bureaucrat of École nationale d'administration always curries a dossier, this time he hides it in his chair.

France: New labour laws for more competitiveness

Moscow, Kremlin, 9.8.2016. President Vladimir Putin of Russia (on the right) and Turkish President Tayyip Erdoğan delivered a joint press conference after their meeting in Moscow. Russia was the first foreign country Erdogan visited after the attempted coup of July last year. (9 August 2016. Foto: Turkish Presidency work).

Syria: A bloody tracer of Trump – Putin rapprochement

DAVOS/SWITZERLAND, 21JAN16 - Li Yuanchao (L), Vice-President of the People's Republic of China and Klaus Schwab, Founder and Executive Chairman, World Economic Forum captured at the Annual Meeting 2016 of the World Economic Forum in Davos, Switzerland, January 21, 2016.

  WORLD ECONOMIC FORUM/swiss-image.ch/Photo Monika Flueckiger

WEF Davos 2016 LIVE: “Chinese economy has great potential, resilience and ample space for policy adjustment”, China’s Vice President Li Yuanchao reassures from Davos

José Manuel Barroso, President of the EC, received a delegation of the European Disability Forum (EDF), led by Yannis Vardakastanis, President of the EDF.

Let your fingers do the walking

Christine Lagarde, Managing Director of the IMF (on the left),  Jeroen Dijsselbloem, President of the Eurogroup. 15/03/2013 (Council of the European Union, photographic library).

Eurozone governed by an obscure body and gray procedures

European Parliament. Committee on Economic and Monetary Affairs (ECON) - discussion with Klaus Regling, Managing Director of the ESM and CEO of EFSF (third from right). Saron Bowles (ALDE, UK), chair of ECON (third from left). (EP Audiovisual Services).

EFSF/ESM boss tells half truths about Troika’s doings

László Andor, Member of the European Commission in charge of Employment, Social Affairs and Inclusion, at the rostrum, participated in the conference on the Social Investment package entitled "Investment, innovation and Involvement", which was organised by the Irish Presidency of the Council of the EU. Joan Burton, Irish Minister for Social Protection, on the right, also attended the event. (EC Audiovisual Services, 03/05/2013).

A new arrangement between Eurozone’s haves and have-nots

Assembly of European Regions

Assembly of European Regions @ European Business Summit 2014: Made in Europe – Made of Regions

Vincent Daher is the newly elected Vice-President of JADE

The consequences of Brexit seen by a European young entrepreneur

John Kerry, US Secretary of State at the World Economic Forum 2015 in Davos (WEF, 23/01/2015)

“We have to do a better job of creating alternatives to violent extremism”, US Secretary of State John Kerry from Switzerland; the Sting reports live from World Economic Forum 2015 in Davos

Federica Mogherini, High Representative of the Union for Foreign Affairs and Security Policy and Vice-President of the EC, and Johannes Hahn, Member of the EC in charge of European Neighbourhood Policy and Enlargement Negotiations, gave a joint press conference on the launch of a consultation on the future of the European Neighbourhood Policy (ENP). (EC Audiovisual Services, 04/03/2015)

Immigration crisis at its very worst: EU to outsource rescue business to North Africa?

More Stings?

Comments

  1. Well, we all love cool smartphones, for which we will shell out hundreds of bucks, specially considering the pries on Samsung Galaxy phones, but how can they compeet with 20$ smartphones haha ?
    http://techinabottle.wordpress.com/2014/05/08/cheapest-smartphone-in-2014-worth-20/

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s