Home Technology Samsung Profits Falling

Samsung Profits Falling

iStock_000038003148_SmallSamsung expects to see a stunning 25% drop in its profit margins for the second quarter of the year. This is being put down to the slowing sales of smartphones globally, and the current strong performance of the Korean currency.

Despite the huge year-to-year fall, the largest mobile phone developer in the world still forecasts that it will make a profit of $7.1 billion for the quarter. The same period last year saw operating profits at $9.4 billion.

This is the third quarter in a row that Samsung Electronics has witnessed profit margins fall, and it is thought that the emphasis they have placed on a levelling smartphone market must now be addressed in order for the company to remain as profitable going forward.

Competition & Slowdown

Samsung has cited the increase in competition across Europe and China, the slowdown in smartphone market growth, and the fact that the Korean won rose against the dollar by more than 11% during the course of the last year. The euro also gave away 7% to the won in the same period.

This level of change in currency value affects Samsung tremendously as they have effectively lost 10% of their income against last year, before even selling any products, as they repatriate their foreign profits.

Samsung has witnessed huge growth in the last five years, and his is purely down to their mobile and smartphone division. The Galaxy range of handsets saw Samsung take its place as the world’s biggest mobile phone maker, replacing Nokia.

However, due to competition and less demand, retail prices have been forced down and this has affected margins. All analytical views seem to point to the trend continuing too.

With the Chinese market dominated by three Chinese manufacturers, Samsung has suffered in this vital territory most of all. The Korean electronics company has assumed a position of “over-dependence on the mobile phone” industry according to market analysts, although Samsung was cautiously optimistic in its prediction of a brighter outlook for the third quarter.

Saeed Maleki
Saeed Maleki
As the former co-founder of "Yazd Zamaneh" publication (زمانه یزد), Maleki is one of the most experienced reporter working for Pars Herald. Saeed started Zamaneh in cooperation with two local publications on 2007. Two years later he closed his news corporation due to post-election protests in which he was accused of agitating people to demonstrate against Iranian government. On the same year he joined Pars Herald Group as the Economy writer. He is currently studying in Yazd's Payam Nour University perusing his bachelor degree. City: Yazd Phone Number: +989127906398 Email: Saeed {at} ParsHerald.com Name in Persian: سعید ملکی

Stay Connected


Must Read

How Safe Is A Visit To The Caribbean?

Expats, tourists and business people visiting the Caribbean may well worry about their safety after a seemingly endless series of warnings and alerts over...

How Safe Is A Visit To The Caribbean?

Expats, tourists and business people visiting the Caribbean may well worry about their safety after a seemingly endless series of warnings and alerts over...

Cyber Police of Azerbaijan Province Blocks 670 Websites

Iran's Filtering Committee, which is operating the supervision of Iranian government, is responsible for filtering and blocking websites which include and promote anti-Islam content....

Somali pirates sentenced to life in prison for American deaths

Two Somali pirates whose participation in a piracy attack which caused the deaths of four Americans have recently been sentenced to multiple life sentences...

Related News

Are Bill Gates’ Days at Microsoft Coming to an End?

Bill Gates has become a name coupled with technological innovation, but it would seem the tides are turning for the renowned genius. The founder and...

China Moves to Publicly Welcome Alliance with America

Chinese President Xi Jinping has asked for mutual respect between his nation and the US during the annual US-China meeting held in Beijing. Any confrontation...

Dad Builds Lifesize 737 Flight Simulator In Son’s Bedroom

A dad’s flight of fancy carried him away when he decided to build a full-size Boeing 737 flight simulator in his son’s bedroom. Laurent Aigon...

Now There’s Even An App For Growing Old

Don’t panic if you are getting old and frail and need someone to monitor you at home – there’s an app to do that...

The Apple Announcement – Was it worth the Wait?

Apple made their scheduled announcement at a press conference on the 10th of September at Cupertino, California. The anticipated iPhone 5S was revealed in addition...


Please enter your comment!
Please enter your name here