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Old Jan 23, 2014, 07:55 PM   #1
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Samsung Misses Earnings Estimates as Apple and Others Pressure Mobile Sales




Samsung's corporate earnings missed expectations and its mobile division saw flat growth year-over-year due to pressure from inexpensive rivals and Apple's new lineup of iPhones, according to an analysis of its fourth-quarter earnings by Bloomberg.

The Korean conglomerate reported net income of 7.22 trillion won ($6.7 billion), well short of the 8.2 trillion won that analysts were expecting. Operating income at the company's mobile unit, its biggest profit maker, was 5.47 trillion won, down from a record 6.7 trillion in the prior quarter, and roughly flat year-over-year.

The company also said it planned to cut its mobile marketing budget after heavy spending also impacted its fourth-quarter profits, reported Reuters. It will also look to make its marketing spending more efficient.

Analysts interviewed by Bloomberg blamed growth in Apple's iPhone line, which saw the iPhone 5s and 5c launch early in the quarter. Apple is scheduled to announce its earnings on Monday.

Samsung Galaxy S4 (5-inch display) with Apple iPhone 5 (4-inch display)
Quote:
"Samsung's two major challenges for 2014 are to maintain its mobile-phone leadership in China and the U.S., while simultaneously growing its tablet business quickly enough to knock Apple iPad from its perch," [Neil Mawston, an executive director at researcher Strategy Analytics,] said.

The company shipped 9 million units of the S4 in the fourth quarter, according to a Jan. 8 report from Daewoo Securities Co., lower than its earlier estimate of 13 million units, released on Dec. 23. In the third quarter, Samsung sold 17 million units, Daewoo said.
Apple is rumored to have sold more than fifty million iPhones in the fourth calendar quarter. Apple is not expected to update its iPhone line until next fall.

Samsung announced that it would launch a new version of its flagship Galaxy smartphone by April, alongside the second version of its Gear smart watch.

(Image courtesy Business Insider)

Article Link: Samsung Misses Earnings Estimates as Apple and Others Pressure Mobile Sales
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Old Jan 23, 2014, 07:57 PM   #2
jonyive4
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blame the galaxy watch.
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Old Jan 23, 2014, 07:57 PM   #3
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They haven't innovated in some time, either. That's the nature of the cell phone industry at this point.
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Old Jan 23, 2014, 07:57 PM   #4
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Trillions
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Old Jan 23, 2014, 07:57 PM   #5
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I'm sure Wall Street will find a way to spin this as bad news for Apple.
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Old Jan 23, 2014, 07:58 PM   #6
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I wonder why the analysts were expecting so much more?

I'm curious as to how much Samsung's lower prices are impacting their revenues... One thing that people have consistently pointed to is that the race for marketshare doesn't necessarily translate to higher profit.

Are they usually down this time of year and then up later on after their usual launches?
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Old Jan 23, 2014, 07:59 PM   #7
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Does this mean we will see less ads of people waiting in lines for iPhones?
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Old Jan 23, 2014, 07:59 PM   #8
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I'm a happy Galaxy Note 3 owner. I'll definitely make the switch back if the Apple phablet is true. Back on track however, I see a lot of GS4, and Note 3's in the wild.
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Old Jan 23, 2014, 08:00 PM   #9
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Quote:
Originally Posted by AustinIllini View Post
They haven't innovated in some time, either. That's the nature of the cell phone industry at this point.
When did they innovate anything more than a gimmick or a half baked product just to say they were first?
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Old Jan 23, 2014, 08:01 PM   #10
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Originally Posted by jonyive4 View Post
blame the galaxy watch.
I wonder how many they sold?
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Old Jan 23, 2014, 08:03 PM   #11
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Bunch'a big screens overcompensating for small profits.
It's like me and the excessively large water bottle I have—wait, I mean, no…
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Old Jan 23, 2014, 08:05 PM   #12
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Originally Posted by Rogifan View Post
I'm sure Wall Street will find a way to spin this as bad news for Apple.
No doubt. When Samsung earnings are booming, it's a sign that they are beating the pants off Apple, so Apple must be in trouble. When Samsung misses earnings, it's a sign that the whole industry is in trouble and Apple must also be in trouble because they're in that industry.
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Old Jan 23, 2014, 08:05 PM   #13
jctevere
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Just goes to show you... Bigger is not always better.
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Old Jan 23, 2014, 08:13 PM   #14
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Originally Posted by jctevere View Post
Just goes to show you... Bigger is not always better.
Samsung markets too many products and it confuses the consumer, and Apple dominates in the Dec quarter, which typically happens. Samsung dominates in the Summer quarter, which is typically a slow quarter. Which would you choose? To dominate in a slow quarter or a busy quarter?

If Samsung was smart, they would simply get rid of their aging products which lose money. Being focused on market share and not focusing on profits is a self destructive business partern Samsung has. They think dominating by market share is more important, whereas making sure they are maintaining good profit margins is far more important, especially when you are going after the market segment that actually HAS money, SPENDS money and generates decent profit margins. The low cost phones LOSE MONEY. That portion of the market Apple is not interested in, because one can get a used iPhone on the cheap if they don't have enough money for a newer model.
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Old Jan 23, 2014, 08:14 PM   #15
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Isn't Android winning? Samsung is the biggest manufacturer of Android phones? Right? And tablets too? Right? Oh... I forgot that Samsung phones and tablets are the same.
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Old Jan 23, 2014, 08:17 PM   #16
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Samsung "bought" marketshare

That huge marketing blitz (some $10B-$14B) for the year bought marketshare, but lower ASP's. Looks like it petered out and isn't sustainable.

Samsung might think to look in the rearview mirror. There's some very hungry Android OEM's in China looking to commoditize the bulk of Samsung's marketshare.
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Old Jan 23, 2014, 08:17 PM   #17
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Samsung is doomed

Thought I'd create another obnoxious saying to throw around on the forums
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Old Jan 23, 2014, 08:25 PM   #18
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9 million S4s vs. 50 million+ iPhones. Really illustrates that while 'Android is winning' they are doing abysmally in the profitable high-end segment where the money is made. Now sure, you can throw in a couple million Notes and a couple million each for Nokia, HTC, and LG, but you are still left with Apple selling way more quality, high-end phones that all of them put together, and by a wide margin.

As for Samsung in particular, they don't do anything that LG or HTC can't also do. Their margins will come down with competition. Meanwhile, Apple will be able to charge a premium for a very, very long time, just like they do in the PC market.
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Old Jan 23, 2014, 08:28 PM   #19
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Things are only going to get more difficult for Samsung when iPhone 6 launches.
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Old Jan 23, 2014, 08:30 PM   #20
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Quote:
Originally Posted by AustinIllini View Post
They haven't innovated in some time, either. That's the nature of the cell phone industry at this point.
Samsung innovation:
- Let's use a biggers screen.
- More cores in the CPU!
- Bigger battery!!!!!
- Take a look at random features that iOS users are requesting and GET THEM FIRST!!! NOT CLEAN OR STABLE, FIRST I SAID!!!! COPY AND PASTE, CALL BLOCKING, GOOGLE ______ PUT IT OUT THERE BEFORE THEM!!
- STRAP ON AS MANY GADGETS AS POSSIBLE!!!! FINGERPRINT SCANNER, IRIS SCANNER, MINI PROJECTOR, GAME CONTROLLER... ANYTHING APPLE DOESN'T HAVE FOR AESTHETIC REASONS... USE IT!!!
- Setup retail stores down the road from major Apple stores and sell 1/2 price Galaxies on the same day as iPhone launches.

---

I'm not a fan of Samsung as you can see but this story:
1) Is not newsworthy within the traditional scope of this site (Samsung <> Apple/Mac/iPhone...etc)
2) This hardly spells doom and gloom for Samsung. However, it does indicate that they're making far less than Apple from selling phones, even when they do meet their targets. Additionally their large marketing budget is not sustainable... I'm already noticing a lot of department stores replacing their large Samsung ads with ads from other consumer electronic brands.

---

On that note...

HTC/Blackberry/Samsung/Cheap Chinese $100 phone = same quality. If anything Sony/HTC/Nokia offer better quality IMO. Why buy a Samsung when you can get exactly the same thing (in the same cheap, plastic case) for a LOT less?
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Old Jan 23, 2014, 08:32 PM   #21
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Quote:
Originally Posted by AustinIllini View Post
They haven't innovated in some time, either. That's the nature of the cell phone industry at this point.
They can't really innovate until they see what Apple releases.

Don't get me wrong, I think Samsung makes good products, but they aren't usually the first to create/enter a market, they come in and do it better than the other guy (or as good and cheaper). However, in the phone/tablet market Apple is does a pretty good job already.
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Old Jan 23, 2014, 08:44 PM   #22
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Wow!

That's a lot of wons... like trillions and trillions...
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Old Jan 23, 2014, 08:45 PM   #23
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Get ready for surprise, Icann

It would not be a huge surprise that all of the rumored figures for Apple are way over blown. I have no colleague who bought iPhone 5s or 5c unfortunately to support any of these figures. I guess there is time for everything, Icann will learn what toilet flash really means. Ha-Ha! No one is pressuring anyone, there are not much new buyers for toys.
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Old Jan 23, 2014, 08:46 PM   #24
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Samsung is doomed!
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Old Jan 23, 2014, 08:47 PM   #25
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Quote:
Originally Posted by AnalyzeThis View Post
It would not be a huge surprise that all of the rumored figures for Apple are way over blown. I have no colleague who bought iPhone 5s or 5c unfortunately to support any of these figures. I guess there is time for everything, Icann will learn what toilet flash really means. Ha-Ha!
I have no idea what you just said there.
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