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Samsung posted their financial results for the second quarter of 2014 today. The entirety of the company brought in 52.35 trillion Korean won, which is a 2% drop from the same quarter a year ago. Profit was 7.19 trillion won, which was a much more alarming drop — down 15% compared to the same quarter a year ago.
Samsung, as you know, is a pretty huge company with their feet dipped into many different areas of technology. Drilling down to the mobile side, we see that the mobile division really didn’t do itself any favors this quarter, an interesting result considering the Samsung Galaxy S5 has been fully seeded into nearly every market you can think of by now.
To be specific, Samsung raked in 27.51 trillion Korean won which is a 12% decrease quarter-over-quarter, and down from 34.96 trillion Korean won the same quarter a year ago. They stayed in the black with a profit of 4.42 trillion Korean won, but that’s 31% less than last quarter.
Samsung’s excuse? Seasonality, mostly. They claim smartphone demand remained flat for the quarter, and that forthcoming 4G LTE deployments in China caused them to miss par on sales of 3G handsets as consumers anticipate the new technology.
The tablet sector was blamed for a good deal of it with Samsung saying there’s weak demand for tablets overall, as well as a lack of interest for consumers to upgrade beyond their first tablet. Being someone who upgrades their smartphone every year I can tell you from experience that I certainly don’t feel compelled to do the same for tablets.
Looking ahead to the second half of the year, Samsung expects smartphone demand to grow thanks to strong seasonality (read: Christmas) and due to the emergence of 4G LTE in China. That said, they aren’t resting on their laurels as they’ve acknowledged that competition in developing markets has stiffened a great deal within the past year. With companies like Motorola releasing capable smartphones like the Moto E and Moto G for under $200 it certainly will take more than the Galaxy brand name to compete. You can check out the full breakdown from Samsung’s report right here.
If their tablet division is losing money maybe it’s because they released like a dozen different models that are difficult for your average user to understand and keep up with. Galaxy Tab, Galaxy Tab Pro, Galaxy Note 2014 Edition, and Galaxy Tab S; this list obviously leaves off all the screen sizes that are normally tacked on there. Their R&D cost have to be through the roof with all these models that don’t sell that fast, which definitely eat into the profits for quarters. Time to play smarter instead of the “spray and pray” method. I love my Note 3 but sometimes Samsung makes dumb decisions.
Spray and pray. Great expression and apt as well.
Samsung, which some world maps erroneously mislabel as South Korea, had its profits dip slightly in Q2.
Reason? Too expensive phones with overkilled unnecessary features (finger print, tracking eyes movements, heart rate monitor, too high screen resolution, IR blaster, and may be more ???) It’s almost miracle that a Samsung phone actually also includes phone call features.
You think the bad quarter was because the Galaxy S5 has too many features and too high a price? The price is the same as the HTC One M8 and LG G3 which both have significantly less features, yet Samsung outsells every other phone manufacturer (LG, HTC, Motorola, Apple, etc.) every quarter.
And now imagine how much there would be even more savings on costs if those overkilled features were removed? Market will tell soon if Samsung is still the leader.
The s5 is a 1080p screen, isn’t it? Don’t tell me you wanted 720.
Also I personally love using the IR blaster on my m8.
Samsung. You are going down. Learn from Motorola. Ditch that crappy Touchwiz UI and focus on delivering real value!
Maybe if they started innovating again instead of filling their phones with gimmicks…
After all the features stuffed in a Galaxy S5, I have a difficult time imagining what else to do? I’ll never even use some of the features it has now. Fingerprint reader? Heart rate detector? Baby Crying detector?
What else can they do?
Make it more waterproof?
Give it a bigger or better technology battery?
Add more ports? (USB host, micro HDMI out, etc)
Once my S5 is paid off next year, I may not switch phones for quite a while. I might replace the battery once or maybe twice. But I find it difficult to imagine what else I could need.
Part of the reason, I think, for Samsung’s dip in profits is that the smartphone market may be saturated. At this point it is probably just a replacement market. So expect to start seeing games to get you to replace a perfectly good phone before its time.
The “features” that you are describing are the very gimmicks I’m talking about. I’ll take BoomSound over any of that any day. Or LG’s knock code. Fingerprint home button? Stolen from Apple. Insecure as well. Waterproof? Yeah go ahead and run that new S5 under a stream of water. Lol. Don’t really need or desire a heart rate detector. The air motion stuff is useless.
The first thing they need to focus on is demolishing Touchwiz and starting over.
Got a great idea for Samsung, how about another Galaxy variant? Maybe throw in another Gear as well just to be sure ;-)
Part of the reason, I think, for Samsung’s dip in profits is that the smartphone market may be saturated. At this point it is probably just a replacement market. So expect to start seeing games to get you to replace a perfectly good phone before its time.
Here are the two most important innovations Samsung should add in its future phones:
1. A Fartometer, this is a ground breaking health monitoring system. Why? the more you fart the more ground you may break.
2. An XRay blaster. This is useful to spread some cancer to the noisy people who talk loudly and unrestrained in public transit.
Can’t forget the bigger screen.