Samsung’s over-reliance on mobile phone sales brings weak profits again this quarter. Profits fell 4.3% due to sluggish handset sales and a poor domestic launch for their S5 (and a gloomy forecast for the next quarter). Samsung gets 70% of their revenue from phone sales. This represents over 75% of the Samsung group’s profits.
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The global Android phone market continues to bloat with Lenovo’s purchase of Motorola from Google. China’s Lenovo, is quickly becoming a direct competitor to LG and Samsung. With the purchase of Motorola mobile, Lenovo becomes the third largest global smartphone maker, pushing LG to fourth place.
Lenovo’s purchase of Motorola from Google set them back $2.91-billion. Seems that Google had purchased Motorola simply to retain their phone patents. Interesting timing as Google recently announced a cross-licensing agreement with Samsung for 10-years.
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After 5 years of growth, the local smartphone market prepares to shrink as much as 14% for the current year. South Korea has the highest density of smartphones users in the world. Internationally, Samsung had released 37 mostly low-end phones last year alone. Amazing how that compares to a single high-end phone from Apple (except for two phones in 2013). Samsung relies heavily on new phone sales and a slowdown could cause problems for their electronics division. Continue reading
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