Third Quarter Operating Profit Of Samsung Electronics DeclinesSa

Third Quarter Operating Profit Of Samsung Electronics Declines

The third quarter results of Samsung Electronics saw a drop of 60 percent in operating profit, which is the fourth straight decline for the South Korean electronics giant. In addition to this, the revenue for the September quarter also declined by 20 percent.

The company earlier revealed it was expecting a decline in operating profit due to competition and increasing marketing expenses. The IT & mobile communications divisions of the company saw a decline for two consecutive periods since the average selling price of smartphones declined. Older models and mid-range smartphone models were popular among consumers.

The company also indicated that despite cautious expectations on an increase in earnings, the mobile business was facing tough conditions. Samsung Electronics revealed through a press release that uncertainty remains for its mobile division. The consumer electronics division of the company did not meet the internal expectations of the company for the third quarter due to a decline in the average sale price of its televisions.

The decline in its operating profit for its fourth consecutive quarter highlights the pressure the company is facing due to saturation in the market for high-end devices and increasing competition at the low-end market.

Although the marketing and hardware proficiency was the main method of attracting consumers as an alternative to the iPhone of Apple, the company has to deal with new competition from vendors of low-end phones like Micromax of India and Xiaomi of China. The iPhone 6 and iPhone 6 Plus of Apple has also threatened its market for large-screen devices.

The company revealed that its mobile business will concentrate in enhancing competiveness for its products and strengthen its long-term business fundamentals to secure sustained profitability and growth. Samsung Electronics also restated its plans of differentiating its smartphones through the use of metal frames and flexible displays.

Posted by James Fried on Saturday November 01 2014, 5:39 AM EST. Ref: CNET. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0