Feature Article

January 07, 2014

Samsung Sees First Profit Dip Since 2011

The last few years have been pretty great for Samsung. Since 2010, the year the original Samsung Galaxy S was released, the Korean electronics giant has established itself as a major player in the smartphone space, a market leader that is outmatched only by Apple — and even then, it depends on the country and region.

Along with its rise to smartphone prominence, Samsung has also enjoyed significant success in HDTVs, in addition to other markets, allowing it to push the boundaries of profitability pretty much every quarter. But, as we all know, what goes up must come down, even if it’s only by a little bit.

Indeed, according to Bloomberg Businessweek, Samsung posted its first profit decline in nine quarters this week, due in part to Apple’s success in China, as well as stalling demand for televisions. Overall, operating profit for the three months ended December, Samsung saw an operating profit of 8.3 trillion won, or $7.8 billion. While this is still a respectable figure, it’s down from nine trillion won ($8.4 billion) in profit from a year ago and falls short of Samsung’s expectations of 10 trillion won ($9.36 billion).

In terms of smartphones, it seems sales of the company’s flagship Galaxy S4 have slowed as the iPhone 5s and 5c have started luring high-end handset buyers in China thanks to a new distribution deal with China Mobile. Meanwhile, Chinese manufacturers dug into Samsung’s sales on the low end with a flood of new handsets available for as low as $100.

As for the television market, it seems Samsung is starting to fall prey to the same lack of consumer interest that caused so much trouble for Sony and Sharp a few years ago. In answer to this, Samsung is planning to release bendable TVs later this year that feature ultra high definition resolutions and, in some cases, OLED technology.

Edited by Ryan Sartor

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