Expectations at Samsung were too high

Expectations at Samsung were too high

Producers of expensive smartphones tend not to fulfil expectations of late: Apple had the problem first and now it seems Samsung’s turn. The South Korean company has adjusted its expectations for operational profit between early April and end of June: 9.3 to 9.7 trillion won, about 6.29 to 6.56 billion euro. Eventually that number was at 10 trillion won.

Smartphones becoming more trivial and cheaper

The sales of smartphones may be on the rise, in the higher regions growth is slowing down. The new iPhone of Apple was the first to be the victim of this trend and now the new flagship of Samsung, the Galaxy S4, is undergoing the same fate.

 

More and more analysts believe future growth will be made in the cheaper segment. That is also where the Chinese producers are eating away at the market share of the leaders. As smartphones become more commonplace, they also become more trivial, with lower prices and lower margins.

 

Still huge growth

All this does not mean the results of Samsung are no longer going forward: a year ago Samsung had sales of 47.6 trillion won in the second quarter of the financial year. This year that number will be between 56 and 58 billion won.  Profits for the company will be between 9.3 and 9.7 trillion won, still 44% to 50% more than in the same period of the previous year. Both numbers are however lower than was expected by financial analysts.

 

Samsung shipped 74 million smartphones in the past quarter, 2 million less than estimated.

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