Light Reading

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
SarahReedy
50%
50%
SarahReedy,
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?
SarahReedy
50%
50%
SarahReedy,
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.
SarahReedy
50%
50%
SarahReedy,
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.

 
SarahReedy
50%
50%
SarahReedy,
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.
Flash Poll
From The Founder
The New IP is actually bigger even than business. Like another hugely important tech that Light Reading is digging into right now, the New IP has the potential to change the world by fundamentally advancing what it is possible for people to achieve with communications.
LRTV Huawei Video Resource Center
Huawei Shares Its Vision of the Future of Mobile Networks Innovations

2|26|15   |   2:30   |   (0) comments


Mobile broadband is changing our lives. It's reshaping the Internet, industry, and society. It allows us to freely connect with one another anytime, anywhere. At this year's Mobile World Congress, Huawei will share its latest insights and newest ideas and technologies that will shape the future of MBB. They will showcase their end-to-end MBB solutions that will ...
LRTV Huawei Video Resource Center
Accelerate Digitizing, Boost Digital Business

2|26|15   |   6:14   |   (0) comments


A new digital revolution is leading us to a better connected world. Together with millions of digital partners, Huawei will help CSPs to build their digital service ecosystem and aggregate a wide variety of digital services. In this video, we find out how Huawei is going to help CSPs implement digital operations.
LRTV Huawei Video Resource Center
The Secret Recipe to Enabling Hyper-Growth Industries

2|26|15   |   3:38   |   (0) comments


With a number of successful cases on network capability exposure, Huawei is going to share the secret recipe to enabling hyper-growth markets with a step-by-step approach.
LRTV Documentaries
BTE 2015 Is Bigger & Even Better

2|25|15   |   03:13   |   (4) comments


This year's Big Telecom Event (BTE) in Chicago is going to provide more opportunities than ever for networking, getting to grips with key industry challenges and opportunities and, equally as important, having some fun.
LRTV Interviews
Light Reading ICT Leaders Roundtable at MWC 2015

2|12|15   |   1:07   |   (2) comments


On Sunday March 1, 2015, Light Reading will host an ICT Leaders Roundtable in partnership with Huawei. At this half-day event, CIOs, analysts and researchers will discuss key industry trends like virtualization in the cloud with a specific focus on new business models. Located at the luxurious Renaissance Hotel near the Fira Barcelona, space is limited so please ...
LRTV Documentaries
Going Green in 2015

2|12|15   |   02:04   |   (0) comments


Energy efficiency is set to be an incredibly hot topic in the telecom industry this year.
LRTV Custom TV
SDN & NFV: Where Are We Going From Here?

2|11|15   |   11:27   |   (0) comments


Vitesse Semiconductor CTO Martin Nuss gives his perspective on why SDN and NFV should be tightly interconnected and how he sees the industry moving forward.
LRTV Documentaries
Time for Gigabit Europe?

2|9|15   |   01:27   |   (4) comments


Gigabit broadband networks are springing up all around the US and they'll soon become more commonplace in Europe.
LRTV Interviews
Brocade Brings New IP Vision to 2020 Vision Executive Summit

2|3|15   |   4:23   |   (0) comments


In December 2014, Light Reading gathered telecom executives in Reykjavik, Iceland to discuss their vision for high-capacity networks through the end of the decade. The intimate, interactive meeting was set against the backdrop of Iceland's spectacular natural beauty. As one of the event's founding sponsors, Brocade's Kelly Herrell shared his company's strategy at ...
LRTV Interviews
Brocade's Kelly Herrell on the New IP

2|2|15   |   12:36   |   (0) comments


In December 2014, Steve Saunders sat down with Brocade VP of Software Networking Kelly Herrell at Light Reading's 2020 Vision executive summit in Reykjavik, Iceland. They spoke about Brocade's approach to the New IP, the future of the telecom industry, and more.
LRTV Huawei Video Resource Center
Dr. Dong Sun Talks About Carriers' Digital Transformation & Huawei’s Telco OS

1|29|15   |   6:28   |   (0) comments


Dr. Dong Sun, Chief Architect of Digital Transformation Solutions at Huawei, discusses how telecom operators can become digital ecosystem enablers and deliver optimal user experiences that are in real-time, on-demand, all-online, DIY and social (ROADS).
LRTV Huawei Video Resource Center
Huawei's Chief Network Architect Talks about Network Experience & Operators’ Strategies

1|29|15   |   3:39   |   (0) comments


In the digital age, network experience has become the primary productivity especially for telecom operators. In this video, Wenshuan Dang, Huawei’s Chief Network Architect, discusses how carriers can tackle the challenge of infrastructure complexity in order to enhance business agility and improve user experience.
Upcoming Live Events
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
All Upcoming Live Events
Infographics
Net neutrality, broadband services and the current outlook on data consumption, as presented by the New Jersey Institute of Technology.
Hot Topics
Cyber Security Expert Warns: You're Doing It Wrong
Sarah Thomas, Editorial Operations Director, 2/23/2015
10 Weirdly Useful IoT Devices
Eryn Leavens, Copy Desk Editor, 2/24/2015
Small Cells Enabling Location Services
Sarah Thomas, Editorial Operations Director, 2/25/2015
MWC: Let the Madness Begin
Ray Le Maistre, Editor-in-chief, 2/23/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Check out Light Reading's interview with Jay Samit, the newly appointed CEO of publicly traded SeaChange International Inc. With a resume that includes Sony, EMI, and Universal, Samit brings a reputation as an entrepreneur and a disruptor to his new role at the video solutions company. Hear what he had to say about the opportunities in video, as well as the outlook for cable, telco, OTT and mobile service providers.
G'day! And welcome to an entirely new feature on Light Reading -- our weekly "CEO-to-CEO" interview.