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While Samsung still made a ton of cash, its smartphone sales and earnings are down

Yesterday, we got a look at how Samsung is performing in the current global smartphone market. IDC’s numbers for Q3 showed us that Samsung’s Q2 2014 shipments fell by 3.9 percent year-over-year (YoY) while its market share for Q2 2014 dipped to 25.2 percent compared to 32.3 percent for the same period last year.
While Samsung’s numbers were down, the overall market saw sales of 295.3 million units for Q2 2014 while sales were up 23.1 percent YoY.
With this background information, we have a little bit of insight into Samsung’s Q2 earnings. As a whole, the company made $6.07 billion in net profit on total revenue of $50.86 billion. Operating profit came in at $6.98 billion, which represented a 15 percent decrease from Q1 2014. More importantly, it was a 25 percent lower than the same period last year ($9.27 billion).

Samsung’s mobile division brought in the most cash for the company, delivering sales of $27.60 billion and an operating profit of $4.29 billion. Those figures were down 12 percent and 31 percent respectively from the same period last year.
Despite what IDC has shown with its own data, Samsung blames its performance on slow global growth:
The second quarter was affected by several factors including the slow global sales of smartphones and tablets and escalating marketing expenditure to reduce inventory.
For those that are expecting Samsung to rebound in the immediate future, the company notes that the “second half of 2014 will remain a challenge” and that “profitability may suffer due to a heated race over price and product specifications.”
However, Samsung is looking to release new “premium mobile devices” and new “mid-to-low-end models” to better compete with mass-market mobile devices. The next big launch on tap for the company is the Galaxy Note 4 that will bring a QHD screen to the table.
The company also plans to launch a phone using “new materials” other than plastic according to The Wall Street Journal in the future, so whether the device will be the Galaxy Note 4 or the Galaxy Alpha remains to be seen.

Sources: Samsung [1], [2], The Wall Street Journal

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By valkator on 7/31/2014 11:59:38 AM , Rating: 2
I never said anything about the previous notes. So, no idea what you are talking about. I currently have a note 3 which the screen is plenty nice.

I never said anything about justifying its existance. The phone will most likely sell well. I was saying it isn't going to be the big seller to boost their profits back to where they want them.

By Reclaimer77 on 7/31/2014 12:05:35 PM , Rating: 2
No sh*t Sherlock. When has the Note line EVER been a big seller to boost profits for Samsung?

You made some silly post criticizing Samsung for making QHD a feature in the Note 4. QHD might not be a big deal to you, but it's literally THE "next big thing" with premium smartphones.

LG was first with the G3, and like it or not, EVERY halo-phone being released from here on out will be expected to have QHD. Halo-phones sans QHD, will be instantly assumed to be inferior.

You can either get on board with that, or take a space taxi back to planet idiot.

By valkator on 7/31/2014 1:08:49 PM , Rating: 4
Again, you show your lack of intelligence. I said the QHD screen is not the feature that is going to boost their profits. They will profit well from this phone like they do with the note line. However, when we see Q4 results, samsung isn't going to see the boost in profits to turn around their gradual decline.

It is basically something that is keeping up with phones that already have had it. I think it is great that we are getting better technology, but to say that feature is going to be the highlight of why it will sell better than the last generation note is insane considering how saturated the market is right now on high end smartphones.

So, when released, it will be not that big of a deal. It is rediculous how stupid you answer back. You are such an idiot.

By FITCamaro on 7/31/2014 2:35:50 PM , Rating: 3
They went down because people are getting even more budget conscience and a bunch of cheap Chinese brand phones came into the mix. The Chinese are quickly becoming who will determine market trends. America is a pretty tapped out market. China is still roughly 800-900 million untapped customers. India is the same way.

By Reclaimer77 on 7/31/2014 2:41:31 PM , Rating: 2
What does intelligence have to do with you setting up false Straw Men to knock them down? NOBODY said the QHD on the Note 4 was going to "boost profits". Not even Samsung!

So, when released, it will be not that big of a deal.

That's your opinion. The whole point of a phablet is the gigantic screen. My opinion is that a large QHD screen IS a "big deal". And so will be the opinion of those buying it.

but to say that feature is going to be the highlight of why it will sell better than the last generation note is insane considering how saturated the market is right now on high end smartphones.

Actually the explosive growth we're seeing is from the budget mid's to low-end smartphones. The high end isn't really all that saturated.

But hey, I'm the one with the 'lack of intelligence', so troll on.

By valkator on 7/31/2014 3:27:18 PM , Rating: 2
You're going to tell me the point of a phablet when I own a note 3? Thanks for the lesson.

Also, you said earlier that I was going to be proven wrong about the QHD screen and how I believe it won't help boost their profits. So your "Nobody said" claim is wrong. You said in an earlier post.

Next, I like how you managed to bring up the iphone in this discussion. I could care less about the iphone. You must have made some assumption that I like iphones in your head.


People that are willing to fork out money for high end smartphones are the same people that currently have decent ones already (note 3, s5, lg g3, etc). It is not easy to just slap down a bunch of money for another small incremental upgrade with nearly the same features like some idiot iphone lover.

I look at my note 3, along with several of my co-workers that own one, then look at the possible specs of the note 4 and not one person thought "boy, I can't wait to have that note 4" like how it was when I had a note 2 or how it was when some of my co-workers that still had the original. The excitement and attitude changed.

People seem to be more content with what is out there now. Note 3 for example is a great snappy phone with a nice display and halfway-decent battery life. What would be a great feature is if the note 4 had nearly double the battery life of the note 3. Then they would really have something there.

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