Samsung warned investors that profits will be dwindling. How much exactly is the question on all of our minds. Samsung states that the drop will be 60 percent from the year ago quarter when the company earned US $ 9.5 billion.
The company says in its third quarter of 2014 that it will earn 4.1 trillion Korean won and that sales will be reduced compared to last year’s third quarter as well. Not in such a dramatic way though, Samsung estimates that sales will top 47 trillion Korean won; down from the 59.10 trillion in last years third quarter, which is nothing to laugh at!
Samsung has been giving hints of slowing down for a while now, as far back as July, the company issued new lower guidance for investors as device sales weren’t growing as a result of the market already being flooded with smart devices.
The new Galaxy S5 flagship phone also gave us a hint of this slow-down. It was released earlier this year and sold 11 million units in the first month of availability which was only a 9 percent gain over the prior year’s model in the same timeframe which told us that the company needs to focus on the low- and mid-range mobile device market, whereas they were producing devices fort he high end since the S3 became a hit.
Samsung doesn’t control all of the hardware and software for its devices since it uses Android software like all the other Google Android using manufacturers. This makes it difficult to stand out from the bunch the way that Apple does.
Samsung has had several failed attempts to create an ecosystem with its own app and media stores and Apple has succeeded in making the App Store an exclusive market for iPhone users thanks to their closed-wall policies and although it has been very interesting to see Samsung rise through the smartphone ranks since the S2, it’s been on my mind as to how Samsung will tackle the latest challenges facing them.
The smartphone and tablet market is so saturated that their strategy of simply focusing on the high-end Galaxy S line needs to be scrapped so that they can aim fort he low-end markets if they want growth every year.