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back to article Samsung profits deflate after mobile division runs out of puff

Global smartphone leader Samsung took a knock on Friday after releasing Q4 financials that show a drop in profits of 11 per cent from the previous three months – its first quarterly decline in two years. The Korean giant said net profits stood at 7.3tr won (£4bn) for the fourth quarter, while operating profit was 8.31tr won (£5. …

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Anonymous Coward

Their crappy watch can't have helped.

What's the next Galaxy phone going to have? fart detection?

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Anonymous Coward

Quarter 4 drop in sales

Did the release of the iPhone 5S have anything to do with this?

Methinks it did, and of course that crappy watch that no one wants.

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Anonymous Coward

It's not PEAK SAMSUNG we're going down. Not really sure why people buy the Samsung handsets - at the low end they are ok but the high end seem over priced - my Moto G is a good handset and can see no reason to pay a lot more for a S3/S4? Suspect others are realising this as well.

Can actually see why people will pay more for an iPhone - they are made better, iOS is good and their support is great - think Samsung are trying to justify their high priced handsets based on the iPhone sell price not based on other Android handsets.

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Silver badge

"Not really sure why people buy the Samsung handsets - at the low end they are ok but the high end seem over priced - my Moto G is a good handset and can see no reason to pay a lot more for a S3/S4? Suspect others are realising this as well."

As a Samsung loyalist, with a small family fleet of the things, and a works Sammy to boot, I'd beg to differ. From my experience the cheaper Sammy's are not a good ownership experience, including the "mini" versions of the high end models.

The full fat S2/S3/S4 were/are all excellent, and there's some excellent deals on S3's at the moment, presumably because they hope mugs will buy the S4 and the S3 is on run-out. And it's with the undiscounted premium models that you're correct about the cost problem. The S3 was pricey but still just manageable before it was discounted, but the S4 is simply too expensive to keep the momentum up. Added to which, the S4 doesn't really offer enough over the S3. I suspect the S5 will struggle for the same reason compared to the (presumably) discounted S4 models. If they make it bigger it becomes a Tab, and there's so many bells and whistles on the S4 that its difficult to see what they can add, other than some generational improvement in the camera, pointless acceleration of the processor.

I can see where you're coming from on the MotoG, but the S3 has a better screen, better camera, removeable battery and the opportunity to boost storage with an SD card. By my maths I'm paying about £170 for the S3 and the balance for my airtime (compared to the lowest comparable SIM free deals, albeit I';d get more minutes and data than I use). A Moto G will be around £140 or a tenner cheaper if you buy from a third party, although you get a shorter warranty of a year. Personally I chose the S3, but I think the continued high pricing is a key reason for the (fairly modest) problems of their phone division.

I suspect as well that the handset market is where the PC market was back in 2006/7 with the launch of Core 2 processors and flat screens for all. Unlike before, the machine still did what you wanted after a couple of years, and you didn't need to upgrade - nor even two years after that. Apple have luckily condiitoned their customers to pony up for a new handset every eighteen months at top dollar, with fairly lacklustre improvements model on model - as a result of which they can still go large, which is a card Sammy have already played. And even if the fanbois is happy with the technical performance of his phone after two years, most will think it worth upgrading because the battery performance will be down to 40% of the new capacity.

Curiously the killer "app" for all smartphones that would persuade punters to upgrade is staring the makers in the face, and it's a week's battery life in normal use. If that means a shorter battery service life then if its user changeable that doesn't matter to me, nor does an extra 1mm depth or an extra 30g of weight.

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Anonymous Coward

The only fair comparison is on SIM free prices from a reputable vendor - let's assume buying from Amazon (non-Marketplace). SIM free S3 is £260 compared to £160 for a Moto G - so it's about £100 less. The S4 is £460 - about £50 less than an iPhone but almost 3x the cost of the Moto G.

Does the S3 run 4.3/4.4 - Moto G does. Both have same number of pixels - not got both to do side by side comparison on quality of screen but the Moto G is a decent screen. S3 has more pixels on it's camera but images from both are ok and neither as good as the iPhone. Overall the spec of the Moto G seems pretty much the same as the S3 without the bloat and £100 in my pocket?

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Anonymous Coward

"Samsung loyalist"

Is that the same as a fanboi?

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Bronze badge

@ledswinger. I agree with your feelings about battery life. The manufacturer's manic obsession with having the thinnest and lightest phone is a disease. Hell, increase the thickness 2 or 3mm, raise the mass by 60g if that's what it takes to get battery life up to at least 4 days. 7 days would be fantastic. If you ever forgot your charger on a trip, you could still carry on if you managed your usage.

I use my phone much more than many people as a remote device in photography and some days I really suck the batteries dry. An iPhone or other phone that didn't have a replaceable battery would be useless to me. I often don't have the ability to plug in somewhere for a charge or I would have to stop or slow down work until I could get enough power to continue.

Smaller, thinner phones are also problematic for me as I have man sized hands, not the hands of a petite asian female. Too small of a phone and I "fat finger" buttons so much that I vent steam.

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Peak Samsung anyone?

Or does that only get thrown at Apple? ;-)

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Silver badge

Re: Peak Samsung anyone?

It never ceases to amaze me that so many people on these forums think Apple are about to die, in spite of the massive evidence to the contrary. It's as if they have adopted an extraordinary ideological position that they will defend to the point of lunacy.

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Anonymous Coward

Re: Peak Samsung anyone?

They're still selling, but the big problem is they've not come out with totally new product in a while.

They seem to regard a round Mac Pro desktop machine as innovation. Interesting design and engineering yes, innovation? not exactly.

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Silver badge

Re: Peak Samsung anyone?

No one has innovated in desktop computers for a long time, so you can hardly blame Apple for not innovating in a market that's been stagnant for a long time.

True innovation is creating something to fill a need people have that they didn't know they have. It might be a novel product, or the type of innovation Apple does, a novel way of designing/using a product that already exists. That's not something you can do on a schedule. No one complained that it took Apple six years after the release of the iPod to come out with their next major product. I guess the fact it took only three to come out with the next one beyond that has had people expecting Apple would maintain that schedule so the fact it will have been four years this spring makes people think they're somehow "late" innovating this time.

Apple developed iPad before the iPhone, but waited years to release it because it couldn't be built cost effectively enough or thin/light enough or with a long enough battery life using the technology available in 2004. Maybe the watch has been ready for a while but is waiting on technology to catch up, or on a manufacturing technology to be ready (i.e. Liquid Metal, sapphire glass)

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Silver badge

Re: Peak Samsung anyone?

"It never ceases to amaze me..."

Agreed. It is a phenomena with Apple and has been noted by journalists who specialise in all things Apple for many years. I think it stems from the fact Apple are a product company and our psychology when confronting that is that they are always reliant on there being a next product which, especially as they are so secretive, can never be seen. For most companies there is a virtual path out in front of them. For Microsoft there is an entire PC industry (albeit shrinking) comprised of many, many companies which puts Windows on their devices. For Google, there is the Internet and search which will not be going away any time soon. But those who don't think about the mechanics of business, Apple's assets appear less tangible.

However another way to think about it (which you probably do as a matter of course) is to think of the space Apple occupy and the market they cater for and the fact those user needs/desires/wants are a constant. Then consider what other company has the assets to take them on in that space and dislodge them. Over time it can be done of course, but it certainly won't be happening in the space of a year or three. Think in those terms and it's clear Apple isn't going away anytime soon.

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Anonymous Coward

Re: Peak Samsung anyone?

That is completely disingenuous - it's a heap more than just a round case.

Innovation - what do you want? It's compact, has PCIe flash, top end CPU and GPU, runs 3 x 4k displays, Thunderbolt 2 ports - for it's intended market it's a fantastic machine. If you just want to build up a BF4 gaming rig with water cooling and OC your CPU perhaps not.

Guess some people would not call that innovation just an evolution but what did you expect?

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Headmaster

Re: Peak Samsung anyone?

It is a phenomena with Apple ...

[sigh] It's all Greek to you, isn't it SuccessCase?

One phenomenon, two or more phenomena.

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Anonymous Coward

Before or after...

Are those figures before or after the $1Bn fine :P

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Anonymous Coward

Samsung Board Room

You just know they are thinking lets release the S5 with a 64 bit processor, finger print sensor, a slightly bigger screen by a few mm and a cheaper plastic casing which makes the phone slightly lighter and slightly thinner and that'll do until the competition blinks again.

I've got a galaxy S4, but I think it'll be my last Samsung. Thinner, lighter and faster seems to be the mindset of most of the manufacturers these days and it's getting boring. The only time that Samsung has bucked this trend is with their horrible clunky massive watch with the camera in the really awkward place. Whoever designed that thing wants their head testing, but no doubt the new one will look exactly the same, be twice as fast 25% thinner, 25% lighter and a slight increase in battery life....

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Re: Samsung Board Room

You forgot the integrated motion chip :)

Oh and the 64 'bitness' will be "future ready" because there won't be a 64 bit Dalvik VM and apps available in time for the launch - a bit like when they released handsets with 4 cores (and advertised as much) but for which it turned out the software restricted them to only ever using two.

I suggest anyone contemplating a Samsung device should complement it with a set of Carlos Fandango tyres for their car (showing my age with that reference).

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Anonymous Coward

Re: Samsung Board Room

If you want Android I'd look at the Moto G - can't imagine Moto make any profit on it but Google (i.e. the same company now) probably do not care. Seems to do pretty much all the S3/S4 does but costs less than half. My wife has an iPhone and I can see why and can see why it costs more - the service is also great - but Samsung are in trouble if the competition is Google (I mean Motorola) with the Moto G.

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Re: Samsung Board Room

"If you want Android I'd look at the Moto G"

Yes I agree. I'm an iPhone user, but if I were to use Android, the Google Nexus handsets and the new Moto G stand out as the best option. The relative sales of Google Nexus versus Samsung it makes it pretty clear to me just how important physical retails stores and relationships with the networks remain.

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Anonymous Coward

Re: Samsung Board Room

The Moto G is intriguing, but I must admit I was surprised to learn that it doesn't run 'stock' android and that they've just released a Google Play edition, which has the stock android...

I'd love to get Stock Android on my S4. If I knew they were going to do a Google play edition I would've held on for that. I've looked online, but there are so many customised ROMs and guides it's hard to know which one to follow to just get a decent Android 4.4 stock ROM that will just download and install 4.5 when it comes out rather than having to reflash and has the Google play store and apps and no missing hardware like camera not working

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Re: Samsung Board Room

... if I were to use Android, the Google Nexus handsets and the new Moto G stand out as the best option.

Sure. They're great handsets.

However, one of the reasons that Samsung are doing so well selling Android handsets is that they haven't gone down the route of building their top-end devices without expandable memory or a user-replaceable battery. Neither the Moto G nor any of the Nexus devices offers those.

HTC used to be a contender, they make some great handsets -- HTC were the Android handset of choice for most people before Samsung acquired that crown -- but HTC stopped supporting expandable storage and replaceable batteries. That's as clear an indication as any that these things are important to a significant number of users.

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Anonymous Coward

Re: Samsung Board Room

"That's as clear an indication as any that these things are important to a significant number of users."

Yes. But Successcase is currently a fanboi, so he expects phones to come with fixed storage, non-changeable batteries. I'm sure if he roots around in the mid range of Android devices he can even find something with a comfortingly familiar widgy little screen.

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Anonymous Coward

Re: Samsung Board Room

What is all this issue with removable batteries - how many people actually replace them - I'd guess very few. My iPhone 3GS is still going strong after 4-5 years and being charged / discharged every day - capacity will have dropped a bit I'm sure but still get a days use out of it. Apple will swap the batteries for you for about £40 I believe - personally for a genuine cell fitted by the manufacturer every 3-4 years is that really an issue.

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Anonymous Coward

Re: Samsung Board Room

I had phones in the past with removable batteries and even bought spare batteries but usually the space just sat in the bottom of my bag or a drawer at work or popped off when I dropped it. If it means a thinner lighter device or perhaps being able to fit a larger cell in the first place that seems to be a benefit. I'm also not a fan of 3rd party cells which is always the temptation - so you buy a £400-500 S4/iPhone and want to save £20-30 after about 3 years of use on a 3rd party battery?

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Anonymous Coward

Re: Samsung Board Room

Perhaps Samsung let you replace the battery as they expect you to need to replace it or the battery life is so poor you need a spare?

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Re: Samsung Board Room

My son had a 3GS - after a year, the battery wasn't lasting very long, and after two years (2 year contract), he had to use an external battery pack.

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Anonymous Coward

Re: Samsung Board Room

Sounds like it was faulty - why didn't you speak to Apple about it - they would almost certainly have replaced it?

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Silver badge

Adored my Samsung Android phones

Now I have a Nexus, and know what Android is supposed to be like. No going back. Moto X is a nice style phone, and the Google Play editions are close to the pure experience. I'll probably stick with Nexus though.

Battery life on my SGS3 was so bad it barely deserved the term "mobile" phone.

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Anonymous Coward

Run out of puff?

You mean run out of things to copy - because everyone says Apple's stopped innovating :-0

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Anonymous Coward

Samsung are waiting for Apple to come out with something new for them to copy ;)

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Bronze badge

Keep thinking Samsung Vs. iPhone

Everyday smartphones are increasingly becoming a commodity. Quite decent third party phones are shipping from China in an ever expanding array of models and with feature sets to match more user's individual needs. Nearly all of these phones are being sold contract-free so users aren't tethered to a provider for years unless they pay a huge ransom to escape.

Samsung's drop in business may have a lot to do with increased competition and an increasing shift to contract free service models. In the past, your service provider's selection of phones limited your choices on what handset you would pick. Manufacturers might have negotiated contracts to supply the phone companies with handsets at favorable pricing if the phone company would agree to limit its selection to that brand for a given feature set.

If Samsung is providing a superior product, does the market place value that increased quality enough to justify the substantial premium pricing? The next phone I am contemplating buying is £61 and has all of the features I need. How much is the S4?

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