In the second quarter of this year net profit of South Korean smartphone maker Samsung has fallen by 8%, sales – by 7.5%. The main reasons for poor results – incorrect assessment of the demand for new flagship smartphone Galaxy S6 and Galaxy S6 Edge, as well as fierce competition with Chinese manufacturers cost smartphones and Apple. Now Samsung is going to lower the price of the S6 and S6 Edge.
On Thursday, South Korean technology company Samsung Electronics has published the financial report for the second quarter of this year. Net profit of the corporation in this period decreased by 8% – from 6.25 trillion won to 5.75 trillion won ($ 4.9 billion). Sales fell by 7.3% to 48.5 trillion won ($ 41.8 billion).
Samsung profit declines for the fifth quarter in a row. The reasons for the continuing decline in profits – the fierce competition with Chinese and Indian manufacturers of smartphones in the budget segment, as well as the corporation Apple. In addition, Samsung misjudged demand for new flagship smartphone Galaxy S6 and Galaxy S6 Edge, which went on sale in April. A feature of Galaxy S6 Edge is curved at the edges of the screen, the experts predicted a fairly high demand it. A negative impact on sales of insufficient Galaxy S6 Edge and disruptions to its supply to the shops because of difficulties with manufacturing a curved screen, as well as too many Galaxy S6 with a flat-screen TV, which was not sold out.
Operating profit Samsung mobile division fell during this period by 37.6% to 2.76 trillion won ($ 2.4 billion). According to experts, the average price of a smartphone sold by Samsung in the second quarter decreased by 10% compared to the same period last year and amounted to about $ 300. Now Samsung is going to reduce the price of Galaxy S6 and Galaxy S6 Edge. According to research firm IDC, in the second quarter, Samsung has substantially reduced its market share in China – up to 9.6% from 19.9% a year earlier. Now the corporation in the Chinese market is only in fourth place after Apple, Huawei and Lenovo.
Following the publication of the report Samsung shares fell 3.8%. Last week the results of the third quarter, reported Apple – the company’s revenue rose to $ 37.7 billion and profits to $ 10.7 billion. The number of sold smartphones in this period increased by 35% to 47.5 million units. At the same time, investors were not pleased with the results – they expected more strong growth in smartphone sales, in addition, they did not like the company’s forecast for the fourth quarter. As a result, shares of the corporation fell by a record with January 2013, 7%.
Apple took almost all the profits
According to the calculations of investment Canaccord Genuity, which refers to The Wall Street Journal, in the first quarter Apple earned an operating profit, which amounted to 92% global operating profit derived by all manufacturers of smartphones, combined. A year ago, Apple’s share was 65%. In second place in the first quarter is Samsung with a share of 15%. Read more
Why do the smart phone market has slowed growth
According to a May report, the research company GfK, the number of smartphones sold increased in the first quarter of this year by 7%. This is a significant slowdown in growth: in the same period last year, sales rose 34%. The reason for this slowdown was the drop in sales in China and developed countries in the Asia-Pacific region. In the first quarter it has grown in popularity PHABLET and smartphones with support for 4G. Read more
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