Gadgets

Samsung’s first quarter profit dropped by 39 percent

May 4, 2015

The South Korean multinational company Samsung announced recently that their company’s profit fell by a troubling 39% from approximately 7.8 billion US dollars in the same quarter for the previous year to 4.3 billion US dollars for this year.

Samsung’s first quarter profit

The smartphone division of the company is looking forward to a much needed boost. Selling a pretty good amount of low-end handsets it is apparently not getting much business from its high-end models.

Consumers are switching to the newer and more “unique” iPhones and the smaller mobile manufacturers which use more or less the same technology as Samsung does. The company launched the Galaxy S6 and S6 edge with a rather distinctive chipset, the Exynos 7420 and is counting on their new handsets to pump up their market.

Since Samsung’s smartphones have been housing hardware which is actually used by a lot of companies, such as the MediaTek and Qualcomm chipsets are used by Motorola and Lenovo as well, a price war would seem imminent. Smaller companies are using the same hardware at a much lower price which seems to have put Samsung on a run for their money.

With so many companies to choose from while buying cell phones, users these days go for the much reasonable ones since they are getting the same resources to use with respect to the higher priced Samsung smartphones.

Samsung is now competing with bigger brands such as Apple and Motorola and even smaller brands like Xiaomi and Micromax and even Lenovo, whose A6000 and A7000 are doing really well in the market. Even though Samsung phones have a better build quality and may come with some supplementary features, still it has a lot of competition at hand since their processor is the same as the other companies.

To compete with Apple, Samsung has to up their hardware as soon as possible and lower the range of their low-end smartphones. Both companies stand in acute contrast as Apple posted its second largest quarterly earnings of all time.

Samsung is predicting a recovery in the second quarter, optimistically the new S6 and S6 edge ought to do some good to the company. Sales on other electronics may or may not be good enough to get Samsung higher in the market.

Samsung is also reportedly going to supply processor chips for the new iPhone and also other smartphone manufacturers. Also their semiconductor business seems to be climbing to 28.5% this quarter from 20.8% a year ago.

Samsung still holds the title of world’s top smartphone manufacturer though. It simply needs a boost which hopefully the S6 and S6 edge can provide.

This article is written by : Awijit Kotlia