As expected, Samsung Mobile profits slump 31 percent as Chinese competition bites

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