Samsung To See Huge Quarterly Profit Drop

Jan 08, 2015

The world’s largest TV and mobile phones manufacturer Samsung has forecast a 37.4 per cent fall in quarterly operating profit from the same period last year.

In its pre-earnings guidance, the firm forecast an operating profit of 5.2tn Korean won ($4.74bn; £3.14bn) for the three months to December.

However, the company has been struggling to retain market share, as people seem to be turning to cheaper phones.

That’s especially visible in China, the world’s largest smartphone market, where the Galaxy has been steadily losing ground.

Analysts agree that the smartphone market in China has become more intense than ever before.

“Xiaomi has proven to be very, very successful and is number one in China already,” Frost & Sullivan’s Andrew Milroy told the BBC.

“More than that, the firm has come from nothing in the last couple of years, so Samsung has to start being more competitive.”

The biggest problem, as Milroy puts it, is that Samsung hasn’t been very creative lately.

“It’s not come out with anything spectacularly innovative recently,” he said.

“Its new models are basically an improvement of existing products, but they pride themselves on being innovative, so they really have to start focusing on that to stay in the game.”

As of October 2014, the Chinese smartphone manufacturer Xiaomi became the world’s third biggest smartphone maker, according to research by IDC.

Author: Sead Fadilpašic
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