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Samsung Misses Earnings Estimates as Apple and Others Pressure Mobile Sales

Samsung's corporate earnings missed expectations and its mobile division saw flat growth year-over-year due to pressure from inexpensive rivals and Apple's new lineup of iPhones, according to an analysis of its fourth-quarter earnings by Bloomberg.

The Korean conglomerate reported net income of 7.22 trillion won ($6.7 billion), well short of the 8.2 trillion won that analysts were expecting. Operating income at the company's mobile unit, its biggest profit maker, was 5.47 trillion won, down from a record 6.7 trillion in the prior quarter, and roughly flat year-over-year.

The company also said it planned to cut its mobile marketing budget after heavy spending also impacted its fourth-quarter profits, reported Reuters. It will also look to make its marketing spending more efficient.

Analysts interviewed by Bloomberg blamed growth in Apple's iPhone line, which saw the iPhone 5s and 5c launch early in the quarter. Apple is scheduled to announce its earnings on Monday.

Galaxy S4 and iPhone
Samsung Galaxy S4 (5-inch display) with Apple iPhone 5 (4-inch display)
"Samsung’s two major challenges for 2014 are to maintain its mobile-phone leadership in China and the U.S., while simultaneously growing its tablet business quickly enough to knock Apple iPad from its perch," [Neil Mawston, an executive director at researcher Strategy Analytics,] said.

The company shipped 9 million units of the S4 in the fourth quarter, according to a Jan. 8 report from Daewoo Securities Co., lower than its earlier estimate of 13 million units, released on Dec. 23. In the third quarter, Samsung sold 17 million units, Daewoo said.
Apple is rumored to have sold more than fifty million iPhones in the fourth calendar quarter. Apple is not expected to update its iPhone line until next fall.

Samsung announced that it would launch a new version of its flagship Galaxy smartphone by April, alongside the second version of its Gear smart watch.

(Image courtesy Business Insider)

Top Rated Comments

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13 weeks ago
I'm sure Wall Street will find a way to spin this as bad news for Apple.
Rating: 46 Positives
13 weeks ago
Does this mean we will see less ads of people waiting in lines for iPhones?
Rating: 46 Positives
13 weeks ago

I'm sure Wall Street will find a way to spin this as bad news for Apple.

No doubt. When Samsung earnings are booming, it's a sign that they are beating the pants off Apple, so Apple must be in trouble. When Samsung misses earnings, it's a sign that the whole industry is in trouble and Apple must also be in trouble because they're in that industry.
Rating: 40 Positives
13 weeks ago

They haven't innovated in some time, either. That's the nature of the cell phone industry at this point.


When did they innovate anything more than a gimmick or a half baked product just to say they were first?
Rating: 32 Positives
13 weeks ago

It would not be a huge surprise that all of the rumored figures for Apple are way over blown. I have no colleague who bought iPhone 5s or 5c unfortunately to support any of these figures. I guess there is time for everything, Icann will learn what toilet flash really means. Ha-Ha!

I have no idea what you just said there.
Rating: 31 Positives
13 weeks ago
They haven't innovated in some time, either. That's the nature of the cell phone industry at this point.
Rating: 19 Positives
13 weeks ago
9 million S4s vs. 50 million+ iPhones. Really illustrates that while 'Android is winning' they are doing abysmally in the profitable high-end segment where the money is made. Now sure, you can throw in a couple million Notes and a couple million each for Nokia, HTC, and LG, but you are still left with Apple selling way more quality, high-end phones that all of them put together, and by a wide margin.

As for Samsung in particular, they don't do anything that LG or HTC can't also do. Their margins will come down with competition. Meanwhile, Apple will be able to charge a premium for a very, very long time, just like they do in the PC market.
Rating: 15 Positives
13 weeks ago
Samsung is doomed :rolleyes:

Thought I'd create another obnoxious saying to throw around on the forums :p
Rating: 13 Positives
13 weeks ago

They haven't innovated in some time, either. That's the nature of the cell phone industry at this point.


Samsung innovation:
- Let's use a biggers screen.
- More cores in the CPU!
- Bigger battery!!!!!
- Take a look at random features that iOS users are requesting and GET THEM FIRST!!! NOT CLEAN OR STABLE, FIRST I SAID!!!! COPY AND PASTE, CALL BLOCKING, GOOGLE ______ PUT IT OUT THERE BEFORE THEM!!
- STRAP ON AS MANY GADGETS AS POSSIBLE!!!! FINGERPRINT SCANNER, IRIS SCANNER, MINI PROJECTOR, GAME CONTROLLER... ANYTHING APPLE DOESN'T HAVE FOR AESTHETIC REASONS... USE IT!!!
- Setup retail stores down the road from major Apple stores and sell 1/2 price Galaxies on the same day as iPhone launches.

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I'm not a fan of Samsung as you can see but this story:
1) Is not newsworthy within the traditional scope of this site (Samsung Apple/Mac/iPhone...etc)
2) This hardly spells doom and gloom for Samsung. However, it does indicate that they're making far less than Apple from selling phones, even when they do meet their targets. Additionally their large marketing budget is not sustainable... I'm already noticing a lot of department stores replacing their large Samsung ads with ads from other consumer electronic brands.

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On that note...

HTC/Blackberry/Samsung/Cheap Chinese $100 phone = same quality. If anything Sony/HTC/Nokia offer better quality IMO. Why buy a Samsung when you can get exactly the same thing (in the same cheap, plastic case) for a LOT less?
Rating: 12 Positives
13 weeks ago
That huge marketing blitz (some $10B-$14B) for the year bought marketshare, but lower ASP's. Looks like it petered out and isn't sustainable.

Samsung might think to look in the rearview mirror. There's some very hungry Android OEM's in China looking to commoditize the bulk of Samsung's marketshare.
Rating: 11 Positives

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