Global smartphones manufacturer Sammy on Thursday confirmed rumors on a first annual profit fall since 2011. Although the company’s earnings may have stabilized, this seems to be only a short term accomplishment.
These developments come after the company loses market share for three consecutive quarters up to July-September. Also, analysts predict that this trend will continue for the last quarter, mostly due to intensive competition from Apple’s new iPhones and more affordable Chinese brands such as Xiaomi. China has traditionally constituted a significant market share for the South Korean electronics giant, but an apparent ability by Chinese producers to lower costs has seen them avail more affordable devices to a market that is traditionally price-conscious.
Still, expectations for better, healthier memory chips demand and enhancements in the company’s mobile business to produce cheaper smartphones is buoying hopes that the tech giant will recover, and that it’s just seen its last bleeding in quarterly earnings.
Sammy revealed that its fourth-quarter operating profits figure is likely to be 5.2 trillion won ($4.74 billion), apparently outdoing a mean industry forecast of 5 trillion won from the Thomson Reuters I/B/E/S survey of 44 analysts.
This view means the company’s 2014 profits will likely be 25 trillion Won, which comes across the board as the weakest in three years. Still, this marks a significant rebound from the company’s 3rd quarter’s 4.1 trillion Won profit, which happens to be the manufacturer’s lowest quarterly result in over three years. Samsung’s annual results will be released somewhere near the end of January.
The company has done a lot in recent times to enhance its competitiveness. There’s good reason to imagine that Samsung executives will continue to make ground-shifting decisions that will change how the company operates in the face of evolving market demands and challenges.