Turnover – 12 %, operating profit – 31 %
Samsung’s smartphone branch is being pummeled: by the end of 2014, the South Korean powerhouse had a market share of about 20 %, compared to nearly 30 % the year before. It is currently wedged between the more expensive iPhone (Apple) in the highest echelons of the market and cheaper Chinese competitors for entry models.
2015’s first quarter has not helped to turn the tide, as Samsung’s own preliminary update shows: the company expects a 39 billion euro turnover (- 12 % compared to last year) and a 5 billion euro operating profit (an astonishing 31 % drop compared to last year).
Luckily for Samsung, it managed to offset the weaker smartphone sales with an increased demand for chips destined for mobile appliances and displays – to be used in, amongst others, Apple’s new iPhones!
Galaxy S6 has to save the year
The new Samsung Galaxy S6 smartphone will be released this Friday and analysts feel the new flagship smartphone should be able to generate a sizable profit increase in the second quarter. “The preliminary views of the Galaxy S6 are pretty positive. It is significantly classier than Galaxy, S5 so people are thinking it will probably do fairly well,” Edward Synder, analyst at Charter Equity Research, said.
“We are just seeing the first glimpse of a turnaround. If Galaxy S6 unit sales are very strong and [there’s] continued demand on both memory and apps processors and the market behaves – which is a big if – I think you could go into a pretty strong summer”, the analyst said.
