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NEWS
NEWS
Samsung posts declining mobile earnings as Apple sets new records
Samsung Electronics Co. Ltd. appears to be losing its grip on the top spot of smartphone manufacturers. The company today reported a steep decline in quarterly mobile earnings, just one day after competitor Apple Inc. reported a record-breaking quarterly net profit of $18 billion.
Figures released by the South Korean company show a decline of 64 percent in earnings from smartphones and other mobile devices for the quarter ended December 31, to 1.96 trillion won ($1.8 billion). This is Samsung’s first annual earnings decline in three years.
This marked the fifth quarter in a row that the mobile division’s earnings declined. A bitter pill to swallow just a day after Apple reported a record 74.5 million iPhone sales for the quarter ended December 27; a figure boosted by the overwhelming popularity of its iPhone 6 and iPhone 6 Plus.
Samsung did not release actual smartphone sales numbers, but confirmed that smartphone and tablet shipments declined in the fourth quarter. The mobile division’s contribution to Samsung’s operating profit dropped to 58 percent for 2014, down from 70 percent in 2013.
Looking ahead at 2015, Samsung is confident that shipments and average selling prices for its smartphones will increase on the back of new mid-tier models like the Galaxy A3, Galaxy A5, the ultra-thin Galaxy A7 and the upcoming flagship Galaxy S6.
It’s not all doom and gloom for Samsung though, as the semiconductor division posted a fourth-quarter operating profit of 5.3 trillion won ($4.8 billion).
This healthy contribution helped Samsung limp home to a profit of 25 trillion won for 2014, down from the record 36.8 trillion won it posted in 2013 and the lowest for the company since 2011.
Looking ahead at 2015, Samsung expects strong demand for its memory chips, used in mobile handsets including iPhones, as well as a growth in sales from its system chips business.
Despite declining profits, Samsung declared an end-2014 dividend of 19,500 won per common share, an increase of 41 percent over the end-2013 dividend of 13,000 won per common share.
photo credit: TechStage via photopin cc
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