For the seventh straight time, Samsung is yet again expecting another decline in operating profits for this year’s second quarter. The South Korean phone maker also stated that due to the increasingly fierce competition in the mobile market, its second quarter profit figures will likely not live up to analysts’ expectations.
For the period that spanned April to June, Samsung posted an operating profit of $6.1 billion. That figure is a 4.2 percent decline compared to the same period one year ago. What is worse is that the number did not even manage to surpass the $7.11 billion average estimate predicted by analysts, as compiled by Bloomberg. As for total revenue, it will probably be somewhere at $42.24 billion, which is yet again lower than analysts’ expectations, which is at $46.64 billion.
Before posting seven consecutive profit declines year over year in quarterly figures, Samsung had managed to post five consecutive quarters of record profits. But over the past couple of years, the South Korean mobile manufacturer have been struggling to be as dominant as it was years ago, as rival Apple has taken some of Samsung’s market share even as mobile upstarts from China (such as low cost phone vendors like Xiaomi, Huawei) are beginning to erode some of Samsung’s confidence in the mobile market.
In the first quarter of this year, Samsung announced that it suffered declines in both market share and unit sales of its smartphones. Its market share for the period stood at 24.2 percent, which is less than the 30.4 percent it enjoyed in the first quarter of 2014. As for its smartphone sales, even though it had sold 81.1 million units of smartphones in that quarter, this number is 4.4 million less than the number it sold in the same quarter one year earlier. Samsung’s operating profit similarly took a hit in the first quarter of 2015. As the company’s sales fell 12 percent, its operating profit declined 30 percent.
Samsung was hoping to turn things around with the release of its two newest flagship devices, the Galaxy S6 and the curvy Galaxy S6 Edge. Both smartphones featured significantly improved features compared to their predecessors and early Galaxy models. JK Shin, mobile chief at Samsung, even predicted that the new devices will allow Samsung to regain its title as king of mobile. But unit sales are expected to slow because of the difficulties in manufacturing the display screen for both handsets.
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