Following Apple's Record Quarter Announcement, Samsung Reports Profit Drop

[diegogaja]

wait...what?

So a "throw it against the wall and see what sticks" is a better business model than "deliberate development of hardware and software to create a specific experience"...dude...hope you don't own your own business..

Why not? Who knows what Samsung has to offer going forward, It is not beyond the realms that Apple may go down, e.g. more and more competitors in China and the US in 2015 / Initial surge of "big phone" demand subsides a little. We are likely 9 months from anything new from Apple whereas plenty of new HTC / Sony / Samsung /LG and others launching over the next months to eat into demand.

We just dont know, it all changes so dramatically. Two years ago, Samsung had stellar growth that no one could see ending, now they are dropping quickly. The thing is Samsung get 3 or 4 goes each year to try and change the trend, Apple typically gets one. Samsung has to get it right once, Apple has to get it right every single time?

 

[Glideslope]

And in the case of South Korea, there's been a change in law regarding sales of phones. Samsung supposedly spearheaded the initial movement, but it resulted in carriers severely cutting back subsidies. Heavy subsidies had been given out for phones from domestic (Samsung, LG, Pantech) makers, while foreign ones (Apple, Sony, HTC, etc.) got little. Obviously not an even playground. But then with the new laws in effect, an iPhone was no longer all that more expensive than a Galaxy S or Note. With the huge screens everyone had now gotten used to being available from Apple, people flocked to iPhones once again.

Very good point, which gets very little attention.

 

[diegogaja]

I just spent a month in China and talked to a lot of people in many cities. Xiaomi doesn't have the advantage in China like Samsung had in Korea. Koreans culturally tend to prefer homegrown solutions, that's part of why Samsung had done so well for many years. Chinese give more respect to high end import brands. I visited the Apple stores in HK, GZ and SH and they were packed to the gills. While there were a lot of no name brands, the phone I saw the most on the street and in subways was the iPhone..and a large portion of that was the phone 6.

Additionally, many Chinese I spoke with are aware of the blatant copying that Xiaomi is doing and see it as shameful. In a land where 'face' is important, people would rather foot the bill for high end, quality tech rather than a low price knock off of questionable quality (there's already talk on weibo and other chinese social media about the cheap, bad quality...and that's saying something in China).

Samsung shipped a lot of phones. Winner, winner, chicken dinner? Not. Profit is the keyword here. Something Samsung needs.

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Nope, until they have US retail operations gonna be a non-starter. I'm not buying a phone I can't replace in a half-hour.

In China, it's a different story, maybe home turf advantage, who yet knows.

 

[DeathChill]

Why is this article comparing Samsung Profit against Apple Income. What kind of twist are they trying to put on this, surely they should compare the profits or the income for both firms.

The article is poorly worded. $18 billion is Apple's profit for the quarter. It's the highest profit of any company's quarter ever.

 

[576316]

Samsung expects continued growth in its mobile division in 2015 in emerging markets, and it also plans to introduce "new materials, innovative design, and differentiated features" in its devices to drive sales.

Innovative design? You mean, "We'll just wait and see what Apple does and then copy that and hope we find a way to win the injunction."

Or am I beating a dead horse?

 

[apolloa]

You're seriously going to argue that a bigger version of things already on the market is a rip-off? Or even some kind of real innovation that CAN be ripped off?

Let's not forget that Apple CREATED both the smart phone and the tablet markets, by themselves. Notice where the word "phablet" comes from?

Just wanted to give you a bit of a history lesson, Apple in no way shape or form 'created' the smartphone market. It has existed long before they turned up, as did app stores, touch screens, mobile email and video calling and internet and phone cameras. I highly recommend you google the history of the smartphone, you'll be surprised.

I really don't think of size as a "feature" to be copied. If Apple had merely been copying, a "me too!" if you will, they would have fully upscaled their size along with other Android OEM's throughout the years. What they did instead was create two flagship phones with different sizes at the same time, with very little compromise between the two (I would say none, but ppi and lack of motion stabilizer).

Really, that's interesting, do you believe an oblong shape with round corners in the same aspect? Considering Apple attempted to claim it had patented them and Samsung had copied them, it is a FACT Android, not Apple created the phablet market. Apple has copied the idea and followed that market as it was losing customers. Simple.

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You may need to realize that the market actually grows, so looking at percentages doesn't necessarily mean the numbers are stagnant. Because they aren't.

But then your argument would be used for all the other competitors as the growing market affects them too, and they are also selling more. In fact on that chart they are increasing shipments. But on that chart it shows Apple's shipment figures are stagnant despite it's sales.

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No one said they have to be number 1. But everyone that owns an iPhone knows this to be a fact.

Doesn't make it a fact though. And the iPhone 4 with iOS6 was the best, despite it's poor camera.

 

[ani4ani]

So a "throw it against the wall and see what sticks" is a better business model than "deliberate development of hardware and software to create a specific experience"...dude...hope you don't own your own business..

.??? Where did I question or propose which business model is superior to any other? Perhaps comprehension isn't your strong point? But unless you are able to see the future, your opinion has no more value than anyone's elses so don't be so condescending. For your information, I have been running businesses for more than 25 years.

 

[apolloa]

Total volume for the year? That's true. But if you look at it in terms of quarterly sales, Apple has come dangerously close to Samsung last quarter, which is quite interesting. It's supposedly 74.5 million vs. around 75~80 million.

It should also be noted that, on a quarterly basis, Apple did briefly hold the #1 title back in 2012 when Nokia and Blackberry were doing a nosedive, and that was with something like 15 to 20% market share. Samsung came over to swoop the title after that and held onto it to this day.

That's an interesting fact, didn't know they held the record before. Of course you have to acknowledge Apples record quarter, but this is down to China mainly, so what happens when the dust settles and they stop buying them? That quarter isn't going to be the same I don't think. It's also worrying how Apple is a 1 product company now.

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So how would that convince an iPhone 6 owner to buy an iPhone 7?

Some fans just buy the next one regardless, that's the culture Apple has made. They think it's an expensive phone but they have to have it.

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I don't think anyone is disputing that Apple isn't selling the most phones.

I think it's showing that Apple's business model (some people like it, some don't) is profitable. I'm not surprised Samsung is still selling a good enough number of phones. I will always say this is like vehicles. Look at Ford F-150s and Dodge Rams. Are they good trucks? Yes. Do they also sell well because they are cheaper in cost and have big rebates to other truck manufacturers like Toyota? Absolutely a huge factor why people buy them.

Same thing with Samsung phones. Do they work? yes. Are they cheaper? Yes. Then there will be segment of the market still buying them because they can't, for one reason or another, afford a higher priced manufacturer.

Personally, I'll never forget reading 1 of the documents where 1 of the Samsung CEO's declared (ad lib), " get a copy of that iphone, tear it apart and build it."

So I think their crappy business model looks good on them with declining profits.

As for competition, it's not so good.

I like your post, but just so you know, flagship Samsung phones in the UK cost as much as iPhones do off contract, iPhones are more expensive on contract due to Apple not allowing the carriers to subsidise them as much as other brands do.

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Yeah, because hundreds of millions of people are stupid. Keep believing that myth from Samy because it's clearly working

Your reply makes no sense at all to the comment you quoted, what myth are you referring to? And who did I call 'stupid'? I don't believe I typed that.

 

[ksuyen]

Screen Size, really?

If people think Screen Size is something to steal from (even in the design sense), you have bigger problem to concern about. Size is one of the thing that you can't claim you own it (unlike overall look and feels). It is perfectly right for any company to design whatever size they wanted to, but it's is illegal to copy the design that one has been working hard to come out with (and I am not talking about a square shape).

 

[apolloa]

Apple has been here for years. But you're right, it's the 6+ that now caters for a market that previously aspired to the Galaxy Note because they can watch TV comfortably in the metro on their massive phones.

...and gold. Freaking gold iPhones everywhere

haha, the modern world. I don't know why people like gold, more blingy I guess? Some special people in this world spend millions on one iPhone, because it's sold gold with a giant ruby stuck on it's back, but it's still an iPhone.

 

[I7guy]

haha, the modern world. I don't know why people like gold, more blingy I guess? Some special people in this world spend millions on one iPhone, because it's sold gold with a giant ruby stuck on it's back, but it's still an iPhone.

No matter how you try to argue it here are the facts:

1. Apple has block busting financials
2. Samsung is scrambling

You can argue eveeything under the sun and it won't change those two immutable facts.

 

[apolloa]

No matter how you try to argue it here are the facts:

1. Apple has block busting financials
2. Samsung is scrambling

You can argue eveeything under the sun and it won't change those two immutable facts.

How is Samsung srambling? Apple is also a one product business now, Samsung is not and is not going anywhere.

 

[Elvergun]

You can argue eveeything under the sun and it won't change those two immutable facts.

Ha...some people seem to think that by arguing they will make the bad news go away.

Some of these people are the same ones who make up stories about bent phones and iOS8 bugs. Their objective is to try to steer potential buyers away from Apple (an to their favorite OS, usually Android) with tall tales...but I don't see why they are arguing now. What could they possibly gain?

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How is Samsung srambling? Apple is also a one product business now, Samsung is not and is not going anywhere.

That's what they said about BlackBerry once upon a time...

 

[lobeyonekenobi]

How nice for you to be so far ahead of all of us fools throwing our money away. And how evil of Apple to copy Samsu...HTC by ...of all the nerve...increasing the size of their phone!! Don't they know only Sams...HTC can be allowed to make anything over five inches? It's downright criminal!!

Stop embarrassing yourself.

Best comment so far, didn't know big screen phones were only allowed for Android users, and as for embarrassing himself he must love S & M

 

[I7guy]

How is Samsung srambling? Apple is also a one product business now, Samsung is not and is not going anywhere.

We're talking mobile phone business only. And apple is not a one product business; it may not be a chip manufacturer or refrigerator maker, but it has more than one product.

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Ha...some people seem to think that by arguing they will make the bad news go away.

Some of these people are the same ones who make up stories about bent phones and iOS8 bugs. Their objective is to try to steer potential buyers away from Apple (an to their favorite OS, usually Android) with tall tales...but I don't see why they are arguing now. What could they possibly gain?

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That's what they said about BlackBerry once upon a time...

That is so true.

 

[fertilized-egg]

How is Samsung srambling? Apple is also a one product business now, Samsung is not and is not going anywhere.

Samsung will be fine but Apple's non-iPhone business is underrated.

Since non-iPhone items are responsible for 31% of the revenue, let's take a leap of faith and assume they are worth about 20% of the operation profit in total with the lower margin accounted for. That means non-iPhone items made about $3.6 billion last quarter.

It's very crude to reach that $3.6 billion non-iPhone profit but I think it works as a ball park figure. How does that compare to Samsung's profit outside their mobile division? Turns out they made about $3 billion in profit last quarter with their mobile division excepted. At least this quarter, what Apple made from their non-iPhone business looks comparable to what Samsung made in their non-mobile business.

The iPhone is such an amazingly massive profit generator that it makes everything else feel so small but Apple's non-iPhone things are really big.

 

[SactoGuy18]

In effect, Samsung essentially benefited from the fact that their cellphones up till now had bigger screens than the top-end iPhone models of the time (look at how much market share Samsung took with the Galaxy S II and S III). But once Apple erased that advantage, Samsung's sales dropped like a stone in water.

 

[SeaFox]

That's like totally different companies. Like in the USA you have Apple and Intel, doing totally different things, and in Korea you have Samsung mobile and Samsung semiconductor. Samsung semiconductor is doing their thing; they wouldn't care if Samsung mobile went out of business.

No, they aren't different companies. That's why Samsung's profits include revenue from both. They are different divisions of the same company. Samsung (as a company) could wind down the mobile division and focus on its chip-making division. Kinda like how Intel is thinking of getting out of mobile processors since they can't make any money with the type of competition they face on the low-end device market.

 

[MacMulti]

LOL! I noticed no Apple bashing commercials lately!

I wish samsung keep on spending their bashing dollar till it gone dry.

 

[gnasher729]

How is Samsung srambling? Apple is also a one product business now, Samsung is not and is not going anywhere.

Apple made more profit last quarter selling computers than Samsung made selling mobiles.

Apple made more profit last quarter selling iPads, iPods, and apps/music/books than Samsung made selling mobiles.

I'll gladly admit that Apple's phone profits slaughtered the whole Samsung company.

Apple isn't a one product company. One product, the iPod, is going the way of the Sony Walkman, except they sold about twice as many and are still selling some. But the iPad, the Macintosh computers, and the iTunes Store are each highly successful products. Apple is running a huge retail operation.

You must be absolutely hating Apple's success, or you wouldn't keep on making ridiculous claims that selling many iPhones is somehow bad for Apple.

 

[gnasher729]

No, they aren't different companies. That's why Samsung's profits include revenue from both. They are different divisions of the same company. Samsung (as a company) could wind down the mobile division and focus on its chip-making division. Kinda like how Intel is thinking of getting out of mobile processors since they can't make any money with the type of competition they face on the low-end device market.

What you don't seem to understand is that from an operational point of view they are separate. The Samsung company owning both semiconductors and mobile divisions doesn't have to "concentrate" on anything. Semiconductors is absolutely unaffected by Mobile's awful trouble (except that Samsung Mobile may be a Semiconductor customer that will reduce their orders, just as Semiconductor is happy about every iPhone sold because it increases their revenue as well). So "Samsung should concentrate on their Semiconductor business" is nonsense. Each division works on their own and does the best they can, which in the case of Mobile isn't very good at all.

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It's very crude to reach that $3.6 billion non-iPhone profit but I think it works as a ball park figure. How does that compare to Samsung's profit outside their mobile division? Turns out they made about $3 billion in profit last quarter with their mobile division excepted. At least this quarter, what Apple made from their non-iPhone business looks comparable to what Samsung made in their non-mobile business.

Excellent comparison. I think your estimate for the non-iPhone profit is actually on the low side; Apple's margins selling computers are very good as well and I don't think iPads are much worse than iPhone.

Now if you removed the profit that Samsung Semiconductor makes from selling iPhone parts (since we removed the iPhone related profits from the Apple calculation), Apple would look even stronger in an Apple non-iPhone vs. Samsung non-mobile comparison. That said, something must be going badly wrong at Samsung outside their mobile business as well, because even with Semiconductor becoming more profitable, their total profits have dropped massively. So that comparison is more due to Samsung's failures than to Apple's success.

Some fans just buy the next one regardless, that's the culture Apple has made. They think it's an expensive phone but they have to have it.

And right there we see _why_ Android companies are not as successful as Apple: Because some people have it in their minds that customers buy Apple phones because of some magical trick that Apple is playing. The reality is that they buy an iPhone because for various reasons that is what they prefer to use. Design, ease of use, ecosystem, and a store with people whose job it is to help the customer. The last part is absolutely unique to Apple.

 

[lowendlinux]

No matter how you try to argue it here are the facts:

1. Apple has block busting financials
2. Samsung is scrambling

You can argue eveeything under the sun and it won't change those two immutable facts.

I also find the peripheral arguments kind of tiring Apple had a gangbusters quarter, Samsung had a lackluster quarter. The dollars collected is the scorecard for companies everything else is irrelevant.

 

[the8thark]

Do we know what division of Samsung has dropped revenue and profits? it could be their phone division but it could be something else

 

[Trapezoid]

How is Samsung srambling? Apple is also a one product business now, Samsung is not and is not going anywhere.

Only on macrumors can someone say a company that made 18billion in profit is in trouble, and a company that has been on the decline for several qtrs is doing great.

Too comical.

 

[I7guy]

Only on macrumors can someone say a company that made 18billion in profit is in trouble, and a company that has been on the decline for several qtrs is doing great.

Too comical.

You know there is a reason one person is posting about apples decline while another is making $9,000,000. If you had to guess which person knew their stuff and got the equation correct, which person would you pick?