View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
July 8, 2014

Galaxy S5 fails to save Samsung from 25% profits drop

Analyst questions Samsung's third consecutive quarterly fall being blamed on smartphone slowdown.

By Ben Sullivan

Samsung has predicted a 25% drop in profit for the second quarter of 2014, claiming a slowing smartphone market is to blame.

The Korean firm expected to make an operating profit of £4.2bn (7.2 trillion won) in the April – June period, which is down from 9.5 trillion the same time last year.

This is the third consecutive quarter its operating profit has dropped. Samsung said it had "witnessed a slowdown in the overall smartphone market growth and saw increased competition in the Chinese and some European markets".

"This led to higher inventories for the medium- and low-end smartphones."

However, a Gartner report released yesterday shows strong smartphone sales globally.

Annette Zimmermann, an analyst at research firm Gartner, tolf CBR: "On smartphone [sales] slowing down, I don’t have evidence for such a trend as of now.

"The bigger issue here is really the profits that are reflection of a price war among Android smartphone vendors in the mid and lower tier price segment. New (Chinese) brands like Lenovo and Wiko and even Huawei put extreme price pressure on the established players in Europe and so Samsung goes along with lowering prices or special promotions.

Content from our partners
Scan and deliver
GenAI cybersecurity: "A super-human analyst, with a brain the size of a planet."
Cloud, AI, and cyber security – highlights from DTX Manchester

"I was already saying a few months ago that Samsung urgently needs to innovate in the mid tier product portfolio and create more brand stickiness in order to compete the rest of the Android crowd. The Galaxy S5 is selling well according to some spot checks I have done so that is not really the issue. I don’t think Tizen is the answer to their problem."

In June, it was revealed that Samsung’s flagship, the Galaxy S5, was only the third best-selling smartphone in the UK in May, losing out to Apple’s iPhone 5S and 5C.

Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.