Samsung Q3 profit sags
October 30, 2014
South Korean electronics giant Samsung on Thursday reported its smallest quarterly profit in three years, with net profit down to 4.22 trillion won ($4.01 billion, 3.1 billion euros).
The figure marked a 48.8-percent fall from a year ago, and was the lowest since the fourth quarter of 2011. Sales revenue was also down, coming in 19.6 percent lower than a year ago at 47.45 trillion won.
"The new lineups such as the Galaxy Note series failed to get enough market demand, while the average selling price of older models fell," the company was quoted as saying by the Yonhap news agency.
Mature markets
Within its mobile technology division, operating profit fell to 1.75 trillion won from 6.7 trillion won in the same period of 2013. Despite a modest increase in unit sales, revenue dropped to 24.6 trillion won from 36.6 trillion won.
"The average selling price of smartphones declined due to an increased share of middle-end to low-end smartphone sales and price reductions of existing smartphone models," Samsung said.
According to market research group IDC, Samsung saw its share in the global smartphone market slip to 25.2 percent in the second quarter of 2014 from 33.3 percent a year ago. Its premium Galaxy S model, released in April, has failed to convince customers and appears set to come under further pressure from Apple's iPhone6.
Moreover, Chinese handset makers Huawei and Lenovo are posing an increasing challenge to Samsung as they were able to boost their combined market share from nine to 12 percent year-on-year in the quarter.
In a statement, Kim Hyun-Joon, vice president of Samsung's mobile unit, announced the re-organization of the firm's product line to "actively respond" to the needs of mid and low-end markets.
uhe/ng (AFP, dpa, Reuters)