Trial Begins In Apple-Samsung Patent Battle

Samsung has announced a 31 percent drop in for its mobile division, broadly in line with its earlier guidance, when almost 200 managers “voluntarily” handed back 25 percent of their bonuses. Year-on-year operating profits fell from 6.43T won ($6.28B) to 4.42T won ($4.32B).

Chinese competition in low- and mid-range handsets was cited as one of the key reasons for the slump, with Samsung Mobile’s SVP Kim Hyun-Joon promising that the company would address this.

We will respond more aggressively to meet demand in the Chinese market […] in the latter half of this year by introducing more products with better specification as well as better price competitiveness …

The strength of the Korean currency was also a factor, given that most of Samsung’s sales are exports.

While Samsung said that it expected to grow its market share, it warned that profits may remain under pressure “as competition over global market share intensifies in the mobile industry”. China’s Xiaomi, Huawei and ZTE have all seen their share of the smartphone market increase over the past year.

Overall Samsung group profits fared a little better, falling 20 percent, the poor performance of the mobile division somewhat offset by the company’s consumer electronics and semiconductor & display businesses. Samsung makes chips for a wide range of other companies, including key smartphone rival Apple.

Photo credit: thenextweb

Leave a Reply

Please log in using one of these methods to post your comment:

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

3 Responses to “As expected, Samsung Mobile profits slump 31 percent as Chinese competition bites”

  1. It’s hard to believe Samsung still wants to improve market share AND increase profits. It really doesn’t seem an easy thing to do when you have all these small companies happily willing to operate on razor-thin margins to gain their own market share. Samsung believes the secret is selling more products with better specs. I’m not entirely sure that’s what sells low-end smartphones. Again, those better specs will cut into profit margins. It must be a very tough balancing act for Samsung to try to provide everything for everyone.