Samsung Electronics has warned investors that its third-quarter earnings will fall below market expectations as a result of declining product prices and increased competition in the smartphone market, despite a rise in the company’s total sales.
The past few months have been somewhat difficult for Sony, to say the least. Following a successful launch of not one, but three Xperia-branded smartphones in 2013, the Japanese company is now facing a serious loss in profit.
As a result, the firm has cut the amount of skilled workers it employs by 15% and adjusted operational strategies to primarily focus on the development of high-end smartphones, in order to seek financial gain rather than the global market share.
It is no secret that LG was no longer content to watch Apple and Samsung battle for supremacy in the smartphone and tablet markets. This prompted the company to increase their efforts at producing devices consumers would be interested in, like the recently released LG G3 or their L Series of devices. Those efforts seem to be paying off as LG announced they shipped a record 14.5 million smartphones during the second quarter and their mobile division turned a profit for the first time after three consecutive quarters of losses.
Look at that!
HTC delivered a phone worthy of high praises in the HTC One M8, and the hard work paid off.
The OEM looked like it was spiraling downwards just a few months ago, as CEOs said they were looking ahead to a June rebound. And they were right.
Everything seems to be going great right now for Samsung. Last year’s Galaxy S III bested Apple’s iPhone in a touchscreen accuracy test, and the company has apparently sold more than 40 million Galaxy S 4 handsets. Now, Q3 of 2013’s financial numbers have come in. Samsung recorded a record profit of $7.76 billion. That is a lot of cash. While smartphone margins are plateauing, they have found success in chips due to their margins almost doubling since last year. According to The Wall Street Journal, “the importance of Samsung’s chip unit–comprised of memory and logic chips–is being highlighted as it now accounts for roughly one-fifth of its total operating profit.” That is a very impressive increase in both margins and growth. Samsung may put more of a focus on their chip business if margins continue to grow.
Amongst all of the cash that Samsung is sitting on, no one knows what they will do with it. The easy answer would be to acquire other companies, possibly to assist the launch of their inevitable wearable products.
Source: The Wall Street Journal
Things certainly could have been a whole lot worse for the Taiwanese manufacturing mogul, but this news is pretty bad. HTC have reported a profit of $40 million USD after tax from revenue of $2.33 billion USD.
Their numbers are a lot better than the reported profits of $2.48 million USD from last quarter, clearly due to the release of the HTC One to more markets and due to fixes in manufacturing issues, but this quarter’s numbers were expected to be much higher.
HTC’s stock price on the Taiwanese Stock Exchange has already fallen a full dollar since the start of July, leaving it at $7.20. The company is certainly going to be in trouble and in dire need of help if they can’t find a way to boost their profits.
As we reported before, over 900 million Android-powered smartphones have been activated since the platform’s debut in 2007. While its no surprise that Samsung leads the herd over HTC, LG and Sony (among other competitors), it may come as a shock just how much they dominate by. According to a report by Strategy Analytics, Samsung captured 95% of Android’s profit in the first quarter of 2013.
The very first Samsung Android phone I used was the Samsung Behold II. I won it from a contest and I was beyond excited to power it up when it arrived at my doorstep. Well, after about a week, sadly, my excitement was short lived. It constantly froze up on me, music wouldn’t load properly and the onscreen keyboard lagged and was inaccurate. Fast forward, the Samsung Galaxy S III has been released and due to it’s popularity, retailers are selling through them at incredible rates.
Remember back in ’08 when Steve Ballmer, Microsoft’s CEO, dismissed Googl’s Android OS, stating that he believed that “building it was financially unsound for Google”? Man, he’s gotta be biting his tongue right about now. Well, even we have to admit, at first the business model for Android did sound a little…odd, being there was no foreseeable revenue, initially. But then again, who are we to question the successful search giant? However, the question does still remain, how is Google making money from Android? Well, ad revenue, duh. You know, those little annoying ads that pop up on your mobile device? Yep, they are there for a reason.