SEOUL: Global smartphone leader Samsung Electronics Company Limited confirmed expectations for its first annual profit decline since 2011, although a pickup in the fourth quarter hinted that earnings may have stabilized in the short term.
The South Korean technology giant today confirmed that its fourth quarter operating profit for 2014 is likely to be around 5.2 trillion won ($4.74 billion), bringing its total annual profits to around 25 trillion won. That means the company saw its first annual profit decline since 2011.
Further one of the key movers in this fall from grace is the relative collapse of Samsung’s mobile business, which represented 68 per cent of the company’s profit at its 2013 peak, and fell to just 44 per cent in this year’s third quarter. In particular, Samsung’s Galaxy S5 handset fell hard, apparently missing the company’s sales projections by 40-50 per cent.
Samsung’s larger phones once snatched away a chunk of Apple’s iPhone audience, the iPhone 6 and 6 Plus have beaten Samsung at its own game: The new larger screen iPhones are winning over the phablet crowd.
Apple sold upwards of 10 million iPhone 6 and 6 Plus handsets in their first weekend on sale, and KGI Securities analyst Ming-Chi Kuo recently predicted that Apple would sell 71.5 million of the phones over the holiday season.
Beijing based Chinese smartphone manufacturer Xiaomi has proven popular in key developing markets like China and India, where customers would rather buy cheaper handsets than Samsung’s flagship Galaxy series. Xiaomi recently announced sales of 61 million smartphones during 2014.
