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Samsung Electronics Forecasts 60% Fall In Quarterly Profit

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http://www.bbc.co.uk/news/business-29516806

Samsung Electronics has forecast a 60% fall in quarterly operating profit from a year ago because of slowing Galaxy smartphone sales.

The world's biggest mobile phones and TV maker said it expects an operating income of 4.1tn won ($3.8bn; £2.5bn) for the three months to September.

That is below analysts' expectations for earnings of 5.2tn won.

The South Korean company will publish full financial results later this month.

Samsung's mobile division, its biggest business, has been struggling to maintain its dominance against rivals such as Apple and Chinese smartphone-makers Xiaomi and Lenovo.

Its flagship Galaxy smartphone line has been losing market share to cheaper models that also have large screens and multiple features.

The firm said quarterly sales amounted to 47tn won, which was below analyst estimates for 50.3tn won.

"Smartphone shipments increased marginally amid intense competition," Samsung said in a statement.

"However, the operating margin declined due to increased marketing expenditure and lowered average selling price."

The bubble burst in smart phones? People realising that upgrading for the sake of it isn't wise financially?

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They arent rentiers. I am using a Samsung galaxy 3 tablet right now, its brilliant. I dont need to upgrade for a long time.

A drug company will make a drug that manages the symptoms, month after month, year after year, theres no money in a cure. A phone company will never sell you the phone line, but you can rent it. You can never buy a lifetime TV licence, but you can renew annually. No landlord today will give you a lifetime tenancy at a fixed rate.

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http://www.bbc.co.uk/news/business-29516806

The bubble burst in smart phones? People realising that upgrading for the sake of it isn't wise financially?

Ive been looking at a replacement for Mrs Loo ( her phone that is)

They invariably mean a serious increase in the contract price.

Whereas, a couple of years ago, it was bung them £30, keep the contract et voila, a new S3 Mini.

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http://www.bbc.co.uk/news/business-29516806

The bubble burst in smart phones? People realising that upgrading for the sake of it isn't wise financially?

Why does everything have to be a bubble on here?

It's called competition; Samsung tried to copy the iphone and now HTC is better. Making hardware for an open platform (android) should always be a competitive and low margin business in the long run. Smartphones will go the way of the desktop computer in years to come.

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as someone who works in the IT world.

I have £60 android phone brought of ebay 'waterproof and shock proof' , A 99quid tablet and wont touch windows 8 laptop. Do i need to replace any of them with new stuff. not chance the new one will do the exactly the same and in case of my windows 7 laptop it is far better than that windows 8 junk.

I just dont get why would you want £500 iphone in your pocket. Its just seems wrong.

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Why does everything have to be a bubble on here?

It's called competition; Samsung tried to copy the iphone and now HTC is better. Making hardware for an open platform (android) should always be a competitive and low margin business in the long run. Smartphones will go the way of the desktop computer in years to come.

I thought Apple copied the Samsung....they do use Samsung electronics in the Apple.

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Why does everything have to be a bubble on here?

It's called competition; Samsung tried to copy the iphone and now HTC is better. Making hardware for an open platform (android) should always be a competitive and low margin business in the long run. Smartphones will go the way of the desktop computer in years to come.

Because sales drive profits, once you have "bubble" sales you have large bubble profits which then disappear when the sales do.

http://bgr.com/2012/05/16/mobile-phone-sales-decline-gartner/

Despite some vendors seeing record smartphone sales, worldwide sales of mobile phones declined 2% year-over-year to 419.1 million units in the first quarter of 2012, according to research firm Gartner. The decline represents the first of its kind since the second quarter of 2009. “Global sales of mobile devices declined more than expected due to a slowdown in demand from the Asia/Pacific region,” said Anshul Gupta, principal research analyst at Gartner. “The first quarter, traditionally the strongest quarter for Asia – which is driven by Chinese New Year, saw a lack of new product launches from leading manufacturers, and users delayed upgrades in the hope of better smartphone deals arriving later in the year.”

Of course competition plays a part but it's hard to see how you are going to get repeated sales of products which can retail £400+.

If consumers switch to lower value phones this will also effect profits which indicates the premium previously paid was a bubble.

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They have spent a ton on marketing. It seems almost ubiquitous - and yet I've no idea which is the latest one or what it does differently to the previous one. Ultimately, they face the same problem as all Android based phone manufacturers. Differentiation. If HTC, Huawei, etc offer something cheaper/better than Samsung - they are screwed. It's a war of attrition

iPhone owners are somewhat locked into the eco-system and hence less likely to move. Apple can continue to farm them providing they don't decide to jump ship for greener pastures.

Personally, I have just jumped back to Apple as I picked up a secondhand 32GB iPhone 5 for under £100 on eBay. It has a far better camera than any of the rivals, even the new ones, at that price - and that was the thing I realised I wanted most - a smartphone which does the basics well enough but has a great camera.

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Maturing product. Less reason to upgrade every year, unless you are the sort of of person who feels the need to upgrade every year to the latest new shiny thing. (in which case you probably have an iPhone). How often do you upgrade your laptop compared to 10 years ago?

The big growth in smartphones is going to come in the sub $99 range, penetrating developing regions.

Wearables are the next thing - not just watches, clothes other sensors etc. Although I can't imagine it will be as big as the smartphone explosion, you never know.

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If you are happy with your current mobile phone like me (I still have a Samsung Galaxy S3) then it makes sense to just get a sim card only deal e.g. micro sim only deals as I just did which gets me unlimited mins, texts and 2GB 4G internet for £9.99 month on EE after cashback over 12 months and I have never had issues with such cashback deals. At some point I will probably get a cheap Chinese made phone with an octo core processor etc but I think the most important bit of the phone for me these days is the camera and I might actually be better going with a brand for that bit.

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I thought Apple copied the Samsung....they do use Samsung electronics in the Apple.

spot on. Samsung leads in features. It is Apple that follows.

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I think Samsung spends a fortune on marketing whereas Apple appears to rely on tame journo fanboys to promote their stuff. Why pay to advertise when the BBC will do it for you?

Imagine if Apple announced a 60% fall expected this quarter.

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http://www.bbc.co.uk/news/business-29516806

The bubble burst in smart phones? People realising that upgrading for the sake of it isn't wise financially?

Had s samsung samrt phone for around 4 years. Paid contract off almost 2 years ago and been sim only since then, pay around £12 a month.

My phone just packed up 2 weeks ago and bought the Samsung S4 for £300 new, unlocked so can move to a new sim package anytime I like.

A fair bit cheaper than having the latest phone.

The cost of phones and the £30-£40 pcm 2 year contracts has ensured I'm not buying into their perpetual contract nonsense any more.

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Seems to be following the LCD television production. Exiting the laptop business (same as Sony).

Presumably not long before they will exit the smartphone business (manufacturing).

Apple might be ok but I suppose could come a point where android platforms are given away for free. Others are hinting at targetting Africa so presumably we aren't far off ?

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Seems to be following the LCD television production. Exiting the laptop business (same as Sony).

Presumably not long before they will exit the smartphone business (manufacturing).

Apple might be ok but I suppose could come a point where android platforms are given away for free. Others are hinting at targetting Africa so presumably we aren't far off ?

3D TV not compelling enough to replace exisitng sets in total, although pricing of TVs still providing margins at the top end. Still big chip and device manufacturer and apple cannot get by without them. Watches seem like a poor sideline - lot for money for what they are and what they bring in functionality. Next big thing across the board is VR, been on the sidelines for years, the tech / processors / screens / sensors and to a certain degree the necessary software is there ready and waiting for a dominant platform and games / apps to suit, think Samsung might surprise in this area, they have made the right connections.

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4k looks great but I don't know if media is up with it yet. Also 4K film files are absolutely massive.

I like my Note 2, can't see much improvement with the new Note 4s so am going sim only. It's like desktops, unless you spend your time in a dark room playing games 10 year old ones are good enough

I'm sure cheaper phones are more popular but I like the way my note links with my samsung tv

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4k looks great but I don't know if media is up with it yet. Also 4K film files are absolutely massive.

H265 is on the horizon, high compression, which will enable 4K broadcasts. Id guess we'll some Sky premium content at some point.

http://en.wikipedia.org/wiki/High_Efficiency_Video_Coding

"HEVC is said to double the data compression"

http://recombu.com/digital/news/sky-testing-4k-at-ryder-cup-this-month

"Sky Sports will film the upcoming Ryder Cup golf tournament in 4K Ultra HD - the next generation of HD. "

I'd personally not pay extra to watch the same stuff just in more detail.

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3D TV not compelling enough to replace exisitng sets in total, although pricing of TVs still providing margins at the top end. Still big chip and device manufacturer and apple cannot get by without them. Watches seem like a poor sideline - lot for money for what they are and what they bring in functionality. Next big thing across the board is VR, been on the sidelines for years, the tech / processors / screens / sensors and to a certain degree the necessary software is there ready and waiting for a dominant platform and games / apps to suit, think Samsung might surprise in this area, they have made the right connections.

I'd like to see VR take off in a big way - but I think this latest attempt won't quite crack it just as previous attempts in the early 90s, and early 2000s didn't. I suspect it won't be until the 2020s that it does.

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I'd like to see VR take off in a big way - but I think this latest attempt won't quite crack it just as previous attempts in the early 90s, and early 2000s didn't. I suspect it won't be until the 2020s that it does.

Previous attempts all needed cables - big turn off. Now have wireless, 4/8 core low powered processors, battery tech to suit and light weight - headset can be a plastic moulding with a few sensors and top end smart phone. Will need to carry along the games developers though, that is the key. Currently the games developers are not havign a great time on the trad games machines, PC games or mobiles (which is tailing off rapidly apart from the top few titles), hence I think they will jump at any chance for a new market primed for growth.

Edited by onlyme2

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My bad eyesight can just about cope with HD with glasses. 4k is pointless.

4k is pointless...if you are a viewer...if you are a markeeter trying to get more money out of gullible consumers it makes perfect sense.

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