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April 30, 2015

Samsung puts faith in S6 as profits plunge

Heavy competition from Apple compressed margins.

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Samsung has released its Q4 2015 financial results, showing a fall in net profit and revenues.

The Korean electronics manufacturer saw net profit fall from 7.57 trillion Korean Won to 4.63 trillion, a 39 percent fall.

Revenue also fell year-over-year to 47 trillion won, a fall of 12 percent.

The year also saw a fall in sales to 47.12 trillion from 53.68 trillion. While Samsung is still the world’s biggest smartphone vendor by volume, competition with Apple has put pressure on sales.

Samsung’s memory chip unit, however, saw a rise in profit.

In its predictions for the next quarter, Samsung expected profits and earnings to rise driven by its new flagship smartphones.

Juniper Research said: "Although Samsung retained leadership of the smartphone market, the company’s shipments fell to just under 82 million; furthermore, although its market share rose q-o-q to 23%, this is well down on the 29% it commanded at this time last year.

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"Meanwhile, increased sales in its smartphone division – bolstered by uptake of the A-series – were in part offset by declining tablet and featurephone sales."

The consultancy firm added: "Nevertheless, Juniper Research expects Samsung’s performance to improve in the coming months – the S6 and the S6 Edge have had a better reception than the S5, as well as boasting new features in the case of the Edge, and have several international markets to break into."

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