Samsung's Mobile Business Sees Major Profit Drop Following iPhone 6 Launch

During its Wednesday earnings call, Apple rival Samsung Electronics reported net profit of 4.63 trillion won ($4.35 billion) for the January to March quarter, a 39% drop from its net profit of 7.49 trillion won in the year ago quarter. A sizable portion of the lost profit came from Samsung's mobile division, which brought in 2.74 trillion won ($2.5 billion) in the first quarter of 2015, vs. 6.43 trillion won in the first quarter of 2014.

Despite the year over year profit loss, Samsung's earnings release highlighted its quarter over quarter improvement and pointed towards increased sales of middle-end smartphones including the Galaxy A series. Samsung doesn't divulge its smartphone sales, but analysts believe the company sold 83.2 million smartphones during the quarter, compared to Apple's 61.2 million.

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The high number of sales let Samsung regain its title of the worlds largest smartphone maker, but many of those sales were for lower-priced phones and not flagship devices, causing it to lose profit year over year. Much of Samsung's profit loss can be attributed to the introduction of the iPhone 6 and 6 Plus, letting Apple devices compete with Samsung devices on screen size for the first time.

Ahead of the launch of the two larger-screened iPhones, big screens were a feature that set Samsung devices apart from iPhones and drew customers for the South Korean company, but with the iPhone 6 and the 6 Plus, Samsung has lost some of its grasp on customers seeking devices with bigger displays.

Samsung expects its profits to increase during the second quarter following the global launch of the company's new Galaxy S6 and S6 Edge and on the strength of its semiconductor business. According to Samsung, demand for its curved S6 Edge has been high, but limited supplies have restricted sales.

Tag: Samsung
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Top Rated Comments

BryanElliott Avatar
121 months ago
You can't copy profits.
Score: 57 Votes (Like | Disagree)
kcirtap00 Avatar
121 months ago
no, profit is all that matters to apple.

innovation matters plenty to other companies who are making actual strides and doing different things.

Profit matters to Samsung too, they're just not good at it. Samsung couldn't innovate themselves out of a paper bag.
Score: 46 Votes (Like | Disagree)
kcirtap00 Avatar
121 months ago
I believe the whole screen on the edge was Sammy's thing.

Which is enormously useful from what I can tell. You know, cause when you have a full screen in front of you, you want to look at a tiny screen on the edge.
Score: 40 Votes (Like | Disagree)
HenryDJP Avatar
121 months ago
Samsung are the biggest hypocrites of any tech company and are tacky and classless. They fuel the bend campaign on the iPhone 6 Plus because of it's thinness. They create the Wall Huggers ad campaign to diss Apple for using built in battery and Voila! A new S6 is born and is a nothing short of a poor copycat of the iPhone 6 Plus. Karma Sammy. That's why your profits are down and people aren't wasting money on your overpriced Apple clone.
Score: 38 Votes (Like | Disagree)
applesith Avatar
121 months ago
iPhone has big screen options now. Galaxy no longer has replaceable battery or expandable storage. Time to watch iPhone gain even more switchers.
Score: 33 Votes (Like | Disagree)
TouchMint.com Avatar
121 months ago
This is good and not because I don't like Samsung it's good because they will have to innovate more and then apple will have to as well.
Score: 21 Votes (Like | Disagree)