Lower smartphone shipments lead to decline in Samsung's Q2 earnings

Samsung on Thursday, reported second quarter operating profit of 7.9 trillion won ($7 billion USD). That is a 17.1% decline from the 9.53 trillion won in operating profit ($9.3 billion USD) that Samsung reported in last year's second quarter. Revenue was 52.35 trillion won ($51 billion USD), off 8.9% from the 57.46 trillion in revenue ($52 billion USD) that Sammy scored in the 2013 period.

As IDC's latest stats reveal, Samsung had a tough period from April through June. With Chinese smartphone manufacturers like Huawei and Lenovo reporting tremendous year-over-year smartphone shipments for the period, Samsung's leading market share declined from 32.3% to 25.2%. For the quarter, Samsung shipped 74.3 million smartphones globally, down 3.9% from 2013's 77.3 million units shipped.

Tablets were also a problem for Samsung in the quarter, as sales of 5 inch to 6 inch smartphones reduced demand for smaller slates. In addition, the replacement cycle for new tablets has lengthened. Earlier this month, Samsung said that it expected to see improvement during the third quarter thanks to the release of new smartphones. The manufacturer could be referring to the Samsung Galaxy Alpha and the Samsung Galaxy Note 4. The former appears to be Samsung's direct challenger to the Apple iPhone 6 with a metal casing, 4.8 inch display, a quad-core 2.7GHz Snapdragon 805 CPU under the hood, 3GB of RAM, and back and front-facing cameras of 16MP and 2MP respectively. Android 4.4.4. would be pre-installed.

The Samsung Galaxy Note 4 could launch with a 5.7 inch 1440 x 2560 resolution display, with the octa-core Exynos 5433 powering the device. The camera set-up would match what is on the Galaxy Alpha, and 3GB of RAM would be expected inside. Still, Samsung will have to go up against the Apple iPhone 6 and the 5.5 inch Apple iPhone phablet in the second half of the year, along with highly competitive models like the Sony Xperia Z3. For Samsung to pull off a comeback for the remainder of 2014, it cannot afford to disappoint for the rest of the year.

source: BusinessInsider