It is sad to see something you love and you share with your friends at a cup of coffee, being in a tight spot at a certain point. I am talking about recent statistics concerning Samsung, the largest smartphone manufacturer in the entire world, failing to have a profit status after two years of world domination, as the Apple iPhones seemed to take over the premium-handset buyers. One reason is perhaps Samsung have sold cheaper models for the China and India markets, which might have affected their business.
Samsung stated yesterday that for the fourth quarter, there was a 6 percent down and 18 percent from the third quarter, with expected revenue of around 59 trillion.
The profit declining might be the reason of Samsung spending too much on high bonuses for their employees, around $657 million, on expensive advertisements or cheaper smartphones for certain low-cost markets.
Jae Lee, analyst at Daiwa Securities Group says that “There isn’t a real driver in the first quarter, with not many new products lined up to show solid profit. The one-time costs, such as bonus payouts, were bigger than what had been estimated”.
This year, the investors will have to be more careful as the sales might be oriented towards a better marketing plans, making the phones even more competitive overseas. As our source states, the investors have dropped down their shares of Samsung since the company is on a slow move.
Another reason might be the tough competition from Apple, as the US manufacturer is adding new network operators on its list, like China Mobile and NTT DoCoMo of Japan.
As this wasn’t enough, Samsung is facing tough competitions from the Chinese phone makers selling their handsets for less than $100. Let`s hope that Samsung will come with a renewed strategy and won`t be let carried away by the success it had for the last two years. After all, what goes up, must come down.