Light Reading
Despite the big profit it's still bringing in, Samsung's smartphone sales are slipping amidst competition from the iPhone and cheaper Androids.

Samsung Gets Smartphone Shock: Only $31.3B in Q4

Sarah Reedy
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
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
Jonestown
Mobile Backhaul: Going to the Dark Side?

10|30|14   |   2:26   |   (1) comment


Heavy Reading's Patrick Donegan shares his view on a dark trend that bubbled up at Light Reading's annual backhaul conference in NYC.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With CEO of SwitchCom

10|30|14   |   4:13   |   (0) comments


SwitchCom, an IT company based in Angola, recommends a variety of Huawei solutions and hardware to their customers in the energy industry.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Ethiopia's Ministry of Water Irrigation & Energy

10|30|14   |   4:08   |   (0) comments


Gosaye Mengistie of Ethiopia's Ministry of Water Irrigation & Energy discusses the collaboration with Huawei in that country.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Dongfang Electronics Corporation

10|30|14   |   5:46   |   (0) comments


Dongfang Electronics Corporation, headquartered in Chengdu, China, is one of China's largest manufacturers of power generators and contractors of power station projects.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Zimbabwe's Customers

10|30|14   |   3:31   |   (0) comments


Representatives of Zimbabwe's Ministry of Power and Development discuss the energy needs of their country as well as new areas of improvement due to enhanced ICT capabilities.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Colbún Chile

10|30|14   |   4:29   |   (0) comments


In Chile, an aging energy infrastructure was in dire need of a modern update. Claudio Valenzuela of Colbún discusses how Huawei's ICT solutions continue to provide crucial information to improve the grid and how an in-country engineer is a cricial asset.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With YuLiao

10|30|14   |   6:27   |   (0) comments


Yu Liao, chairman of the Chinese Association for Renewable Energy in Germany, discusses the role that ICT solutions play in helping to grow renewable energy resources in Germany.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview

10|30|14   |   2:54   |   (0) comments


Sifang has been working with Huawei on several projects. JingTao Wu, Assistant President of Beijing Sifang Automation Co. Ltd., believes that the cooperation with Huawei can facilitate Sifang's process of internationalization.
LRTV Huawei Video Resource Center
A Better Connected Smart Grid: Powering Laos

10|30|14   |   5:38   |   (0) comments


Representatives of Electricite Du Laos (EDL), a state-owned corporation, discuss the importance of ICT solutions in serving their country's energy needs.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Junwei Lu

10|30|14   |   4:50   |   (0) comments


Professor Junwei Lu of Griffith University Australia describes his work with micro grid technology and the future of the power industry.
LRTV Documentaries
The Next-Gen Network Disconnect

10|29|14   |   01:23   |   (2) comments


There's a lot of talk about making networks more simple with SDN, NFV and next-gen broadband technology – but what about the complexity of introducing such capabilities?
LRTV Custom TV
Grow Your VPN Service Revenue

10|27|14   |   4:00   |   (0) comments


Watch how CSP product managers can better differentiate and maximize the value of their Internet, VPN and cloud services for business services customers, by adding premium application performance visibility to their data services.
Upcoming Live Events
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Microsoft's Skype Embraces WebRTC on IE
Sarah Reedy, Senior Editor, 10/27/2014
FTC Slaps AT&T With Throttling Lawsuit
Sarah Reedy, Senior Editor, 10/28/2014
Wheeler Gets Down With OTT
Mari Silbey, Independent Technology Editor, 10/29/2014
China's MVNOs Hit the Wall
Robert Clark, 10/27/2014
Let's Not Kill SDN & NFV With Silos
Francois Locoh-Donou, Senior VP, Global Products Group, Ciena, 10/28/2014
Like Us on Facebook
Twitter Feed