Samsung predicts Q4 profits will fall 37pc on last year

8 Jan 2015

South Korean consumer electronics giant Samsung has predicted a 37pc fall in profits for the fourth quarter, marking the fifth consecutive decline for the company.

Samsung, the world’s largest manufacturer of smartphones, is reeling from overproduction ofGalaxy S5 smartphones by 20pc more than what was needed, the sale of 40pc fewer Galaxy devices as expected as well as increased competition in Asian markets from fast emerging smartphone players Xiaomi, Huawei and Lenovo.

Samsung is also facing increased competition from Apple which launched bigger screen devices like the iPhone 6 and iPhone 6 Plus in recent months.

New research from Kantar Worldpanel indicates that the success of Apple’s new larger screen devices has contributed to an overall decline in Android market share in most markets worldwide in just a few months.

Samsung says its operating profit for the quarter will be 5.2 trillion won (US$4.7bn), down 37pc from a year ago.

Overall sales for the quarter are likely to be down to 52 trillion won (US$47bn).

The declining fortunes of Samsung in the smartphone market almost led to a significant management shake-up at the company.

That said, there is nothing more dangerous than a wounded or cornered tiger. At CES this week Samsung showed it still has teeth and revealed the tiny Samsung Portable SSD T1 storage device capable of up to 1 terabyte of storage as well as a compelling vision for the internet of things and the smart home, emanating from its acquisition last year of connected home start-up SmartThings.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years

editorial@siliconrepublic.com