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.
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.
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 →