Samsung Expects Q3 Profits To Be 60% Lower Than Last Year

Posted by News Room On Tuesday, October 7, 2014 0 comments
Analysts expect the added competition from Apple's new iPhones would have hurt Samsung's high-end phone sales

At this time last year, Korean electronics giant Samsung was basking in the glory of posting a record quarterly profit of $9.6 billion, but since then things have gone ever so wrong for the company. Samsung has announced that it expects its Q3 profit to be between $3.6 and $4 billion – that's a 60% year-on-year decline.Samsung's Q3 earnings call is expected to usher in the company's fourth straight quarterly decline in profits, and in all likelihood the culprit should be its smartphone division. While the company hasn't released sales data just yet, reports suggest Apple's new iPhones are causing Samsung's high-end phone sales to dry up.It was a similar case in the previous quarterly earnings report, except Samsung credited its massive drop in profits to an ailing low and mid-range smartphone line-up. Chinese manufacturers like Xiaomi and Lenovo are expanding their global reach, and are quickly eroding Samsung's market share.Any success to be had at countering the new iPhone 6 with the Galaxy Note 4 and Galaxy Alpha will not be realized until the next quarter. Samsung however has been quite quick at spotting the elephant in the room, and is looking to expand its memory chip, processor and display businesses to offset smartphone losses.The company hasn't yet given up on the smartphone sector just yet, and proof of that comes in the form of its Galaxy Alpha and Galaxy Note 4. While the company most likely won't be giving Apple a run for its money with the new devices, some suggest price cuts on high end models (despite hurting profits) as a way for Samsung to arrest declining sales. 

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