& cplSiteName &

Samsung Gets Smartphone Shock: Only $31.3B in Q4

Sarah Thomas
1/24/2014
50%
50%

Android giant Samsung saw a slip in its revenue in the fourth quarter as it faced increasing competition from the iPhone on the high end and cheaper Androids on the low end.

The South Korean handset maker's mobile division, which is responsible for more than half of its revenue, made 33.89 trillion won ($31.3 billion) in the quarter, down 7% from the previous quarter. Its mobile profit fell 18% from the third quarter to 5.47 trillion won. Overall net income rose 5.4% to 7.22 trillion won ($6.7 billion), but it was the company's slowest profit growth since it fell in 2011. (See Samsung Operating Profit Dips 18% in Q4.)

Despite the big numbers Samsung Corp. still posted, the market didn't react favorably to its decline, which many have been predicting for a while now. (See Falling ASPs Foretell a Smartphone Shakeup.)

Samsung has dominated the Android market for the past few years. According to Juniper Research Ltd. , it accounted for a third of all smartphones shipped (about 85 million) in the third quarter. But, the tables have been starting to turn as it battles Apple Inc. (Nasdaq: AAPL) in court and also in the market, alongside cheaper Androids from makers like Huawei Technologies Co. Ltd. and Lenovo Group Ltd. (Hong Kong: 992). (See Smartphone Shipments Hit Record With Nokia Back in Top 3.)

The company says it expects smartphone demand to decrease next quarter, as well after what is typically the best-performing holiday shopping quarter. Samsung is, however, anticipating growing demand for smartphones as LTE expands in Europe and China, even as it braces for more competition in the feature phone market this year.

— Sarah Reedy, Senior Editor, Light Reading

(8)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
1/27/2014 | 9:31:16 AM
Re: Tough being on top....
I was being a bit sarcastic with the headline, given how big its mobile revenue still was. But, I don't think it's fair to completely dismiss the impact of competition.

Rutberg today says, "In our view, Samsung continues to be well positioned but 1) the earnings decline is due to natural evolution of smartphone ASPs and unit growth and 2) other OEMs are gaining ground. As one operator executive stated, "Samsung will remain in the top two," but "the delta between the top two and the #3 and #4 will shrink."
Kruz
50%
50%
Kruz,
User Rank: Light Sabre
1/25/2014 | 4:16:03 AM
Re: Tough being on top....
The figures posted for Samsung are not alarming and IPhones are not responsible for that decline in revenues. It was just expenditures on marketing and a big onetime expenditure. Smartphone shipments slightly declined but tablet shipments surged thanks to Note 10.1 and Galaxy Tab3.

Competition from smaller players is not affecting Sammy (rather affecting Nokia at this time) but 2014 might be the year where these step in. Sony is keen on having a strong foothold, and the Chinese are delivering amazing pieces of Hardware. They will do, 2 years from now, what Koreans did few years ago, with a huge Chinese market to start with.
DanJones
50%
50%
DanJones,
User Rank: Blogger
1/24/2014 | 6:50:58 PM
Re: Tough being on top....
Wonder if Huawei & ZTE are hitting home in Asia?
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
1/24/2014 | 2:00:09 PM
Re: Samsung....
Financing the phone is certainly similar to paying a contract, but the low-cost phones would shine there because there is less to pay off. I think they'll benefit much more than they have while contract reigns. It'll definitely be interesting to see if that takes hold and changes consumer buying habits. Seems like some will still opt for that iPhone, which appears to be cheaper on a contract.
RitchBlasi
50%
50%
RitchBlasi,
User Rank: Light Sabre
1/24/2014 | 1:44:32 PM
Samsung....
Well, do one thing and one thing right...correct?  You'll never hear about iOS being fragmented like Android (reminds me of the early Java days) - everything works the same, has the highest quality, and folks will pay for it.  It will be interesting to see what happens to the device market in the U.S. over the next few years when people realize that financing a phone over two years (or whatever upgrade plan is available) is the same as having an ongoing contract -- seeing if people will outright buy a phone and how long they will keep it.
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
1/24/2014 | 1:16:46 PM
Re: Tough being on top....
Yeah, I have a feeling it was more the iPhone pressuring it than other Androids, because HTC also hasn't been doing well. But I'll be curious to see how these smaller Chinese and Indian companies fare in the smartphone market.

Also, maybe Samsung's million sizes of devices isn't resonating with its customers? Is one-size-fits all better?
RitchBlasi
50%
50%
RitchBlasi,
User Rank: Light Sabre
1/24/2014 | 1:08:33 PM
Tough being on top....
Interesting that both Samsung and Nokia were hard hit this last quarter.  I wonder if some of the smaller companies with the $100-200 smarphones are also impacting sales.  At CES, there were a bunch of companies that were unfamiliar to me but had some very slick products.  It wasn't that long ago that Samsung was the cheaper, low quality device.  How the tables have turned.

 
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
1/24/2014 | 12:17:25 PM
Marketing mix up
Samsung says it is going to lower ts marketing spend this year too. I can see why -- it spent a ton on its huge Super Bowl spend and celeb-ridden commercials, and they don't appear to be working.

 

From Reuters: "We'll actively leverage global sports events such as the Sochi (Winter) Olympics and ourretail channels... but we will try to raise the efficiency of our marketing spend and lower our overall mobile marketing budget to revenue this year compared with last year," Senior Vice President Kim Hyunjoon told analysts after the company released its earnings.
From The Founder
The time has come for a telecom app store to save the industry.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Documentaries
Order From Chaos: The Steve Saunders BCE Keynote

5|24|17   |   17:27   |   (0) comments


Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability testing.
Think of this as the video sequel to the recent columns he's written about NFV and the prospect of a telecom app store. (See

LRTV Documentaries
Service Provider Panel: Partnering in the Digital Era

5|22|17   |     |   (0) comments


Coopetition has always been part of telecom, but the ecosphere now includes data centers, vendors, apps developers, cloud service providers and Internet content providers. This BCE 2017 panel explores the new attitudes among network operators as to the value and variety of ...
LRTV Interviews
Site Demo: AT&T's IoT Flow Platform

5|19|17   |   04:25   |   (0) comments


At AT&T's R&D center in Tel Aviv, Israel, project leader Eyal Segev talks about the operator's Flow platform and how it helps to prototype IoT applications.
LRTV Documentaries
Agent of Change: A Q&A With AT&T's John Donovan

5|18|17   |     |   (0) comments


Carol Wilson talks with the man leading AT&T's transformation efforts about the challenge of change.
LRTV Documentaries
BCE Service Provider Panel: The New Business Realities

5|18|17   |     |   (0) comments


For virtualization to happen, the telecom industry first has to grapple with key functional aspects of SDN and NFV that need to be universal, such as onboarding of virtualized network functions and federation of software-defined networks.
LRTV Interviews
BCE Service Provider Keynote: CenturyLink

5|16|17   |   22:32   |   (0) comments


Aamir Hussain leads the Product Development and Technology organization at CenturyLink, which includes the company's information technology function. He is an experienced senior technology executive with more than 25 years of proven success in the implementation of global technology operations, operationalization of complex technology, infrastructures and business ...
LRTV Interviews
CenturyLink CTO on Transformation

5|16|17   |   7:43   |   (0) comments


The 50-year-old telco has already gone through several transformations, including every time it made an acquisition, but its purchase of Level 3 coupled with changes in technology and customer expectations necessitates its biggest transformation yet.
LRTV Documentaries
Light Reading Hall of Fame 2017

5|15|17   |   5:05   |   (1) comment


Find out who made it into Light Reading's Hall of Fame this year.
LRTV Interviews
Site Visit: AT&T's Tel Aviv R&D Center

5|15|17   |   09:58   |   (1) comment


Nir Shalom, general manager and VP of application development at AT&T Israel, talks about the key service developments undertaken at the AT&T R&D facility in Tel Aviv and how the team there has adopted new ways of working.
Telecom Innovators Video Showcase
Act on Your Intelligence With Amdocs aia!

5|15|17   |     |   (0) comments


Amdocs CMO Gary Miles explains how communications service providers can seize the AI opportunity with Amdocs real-time digital intelligence platform.
LRTV Interviews
Logtel CEO: Making Sense of IoT

5|15|17   |   09:48   |   (0) comments


Jacques Bensimon, founder and CEO of Tel Aviv-based training and consultancy Logtel, talks about the need to make IoT more than just a buzzword.
LRTV Huawei Video Resource Center
The Challenges of Mobile Banking Implementation

5|12|17   |     |   (0) comments


Kamal Quadir of bKash Limited explains the challenges and needs of implementing mobile banking in the Bangladesh market.
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
AT&T's Donovan: Women Adapt Faster Than Men
Sarah Thomas, Director, Women in Comms, 5/18/2017
Verizon on M&A: Who Needs a Cableco?
Mari Silbey, Senior Editor, Cable/Video, 5/17/2017
Standardization Needs Room for Innovation
Mitch Wagner, Editor, Enterprise Cloud, 5/17/2017
Fright Wigs & Cocktails: BCE 2017 in Pics
Mitch Wagner, Editor, Enterprise Cloud, 5/19/2017
What's Blocking 4K TV Today
Alan Breznick, Cable/Video Practice Leader, Light Reading, 5/22/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
Animals with Phones
What Brogrammers Look Like to the Rest of Us Click Here
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.