Samsung Gets Smartphone Shock: Only $31.3B in Q4
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