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Samsung's struggle: profits to slide again as smartphones miss out to rivals

South Korean tech giant to record fourth consecutive quarter of falling profits

Analysts said rising memory chip and semiconductor prices were likely behind Samsung's impressive profit estimation.
Samsung's smartphones are losing market share to Apple at the higher end and to low-cost brands such as Lenovo at the lower end

By Reuters
7:03AM BST 07 Oct 2014

Samsung is heading for its first annual earnings drop since 2011 after it revealed its July-September profit would be the lowest in more than three years and said short-term prospects for smartphones were uncertain.

The world's smartphone leader has seen its global market share decline in annual terms for the past two quarters, according to Strategy Analytics, out-classed by Apple's iPhones in the premium segment and undercut by Chinese rivals like Lenovo and Xiaomi at the bottom end.

Even so, Samsung's shares jumped 1.2pc overnight, reflecting expectations that the company's profits have bottomed and will pick up with the launch of cheaper smartphone models in the months ahead.

"Considering the operating profit guidance, it looks like the company dealt with unsold inventory issues during the third quarter," Alpha Asset Management fund manager Hong Jeong-woong said. "I think Samsung's earnings are at a turning point."

Samsung said in a regulatory filing on Tuesday that operating profit for the third quarter likely fell 59.7pc to 4.1 trillion won (£2.4bn), well below analysts' expectations of around 5.6 trillion won.

continued;
http://www.telegraph.co.uk/fi[....]phones-miss-out-to-rivals.html
https://gigaom.com/2014/10/07[....]-60-profit-drop-as-sales-slow/
http://www.t3.com/news/samsun[....]-will-fall-60-for-q3-this-year
http://www.mcvuk.com/news/rea[....]-operating-profit-drop/0139467

Samsung promises new phones but faces a battle on two fronts
http://www.zdnet.com/samsung-[....]ttle-on-two-fronts-7000034419/


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Posted: 2014-10-07 18:01:13
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Unless I am missing something it is not a loss but a big drop in profit compared to last year. Title of the thread is misleading!
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Posted: 2014-10-07 18:38:52
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Thanks for the headsup... title is now corrected.
I was thinking its a loss... Or rather a 'loss in profits', which is still technically a "loss".
But you're right, it was misleading....thanks for pointing it out.


cheers!

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Posted: 2014-10-07 21:51:18
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Less profit is considered a loss for a lot of investors, they might think it's the beginning of the end.
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Posted: 2014-10-07 23:36:51
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Samsung still making massive profits anyway it's just others gaining market share
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Posted: 2014-10-08 00:34:00
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Sales of devices up BUT average selling price down, and heavy marketing spend = the profit drop.

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Posted: 2014-10-08 05:59:15
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It must mean that S5 is not selling as well as expected . Maybe Samsung will learn from this and not get complacent when it will come to S6
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Posted: 2014-10-08 07:41:51
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When did they become complacent ?

I think companies like HTC, LG and Sony getting more up to Samsung's speed take some of their sales. But that's good for us as customers to have a choice rather than predictably having to get a Samsung or lose many functions or features.
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Posted: 2014-10-08 13:19:57
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In my opinion they became complacent with the S5- very similar design with S4,s3, same camera , similar screen - not much break through . I think they are on the right track with Alpha and Note 4 though
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Posted: 2014-10-08 13:29:40
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Yea..Competitors have risen up in the past year or so with great devices.I guess all SAMSUNG need is an All-New design to get back some more attention.
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Posted: 2014-10-08 14:28:50
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