Samsung earns considerably less money with phones

By admin On Oct 30, 2014

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Profit from Samsung’s mobile business fell by 74 percent in the quarter. The company is particularly troubled by competitors such as Xiaomi in China. Samsung’s profit as a whole also fell sharply in the past quarter: by 49 percent.

The mobile branch of Samsung achieved a turnover of 18.5 billion euros in the past quarter. That is a decrease of 14 percent compared to a year earlier. The division’s profit amounted to 1.3 billion euros. That’s a 74 percent drop from a year earlier, and the lowest point since the second quarter of 2011, analyzes The Wall Street Journal.

Samsung is facing increasing competition from cheaper phones, such as that of the Chinese Xiaomi. Globally, Samsung is still the largest telephone supplier, according to data from IDC, Counterpoint and Strategy Analytics, but the size of its market share is declining. A year ago, Samsung still controlled a third of the market; now only a quarter. In China, Samsung would even have been overtaken by Xiaomi as the largest telephone supplier.

Samsung has revealed to investors that the company has indeed sold more smartphones, but that the company has mainly supplied fewer high-end models. The company promises improvement and more efficiency: the latter could mean that Samsung will release fewer phones, reports AP news agency.

Samsung’s consumer electronics branch, which includes its television branch, also brought in less money. That branch’s sales fell to 11.6 trillion won; converted 8.7 billion euros. that’s an 11 percent drop. The semiconductor branch of Samsung, which makes memory and socs, among other things, raised slightly more money: 9.89 trillion won, converted 7.4 billion euros. A year ago it was 9.74 trillion won.

Samsung’s turnover as a whole amounted to 47.5 trillion won in the past quarter, or 35.7 billion euros. A year ago it was 59 trillion won, converted 44.5 billion euros; a drop of 19 percent. Net profit amounted to 4.2 trillion won, or 3.1 billion euros; about half less than a year ago.