Samsung’s Profits Plummet as Smartphone Business Weakens

By Tim Maytom


Samsung reported its first annual earnings decline in three years, largely pulled down by its weak mobile business, with Apple closing the gap in terms of smartphone shipments.

The company’s fourth quarter operating profit was in line with guidance issued earlier this month, at 5.3 trillion (£3.2bn), putting the annual profit at 25 trillion, down from last year’s record 36.8 trillion, and the lowest result since 2011.

Annual mobile sales brought in just 107.4 trillion, a 21 per cent drop year-on-year, as pressure from both cheap smartphones at the bottom of the market and Apple’s new iPhones at the top squeezed Samsung’s share tighter than ever.

The company’s semiconductor chip business was the lone high point, with a 6 per cent year-on-year increase in revenues, bringing in 39.7 trillion. While a healthy demand for chips helped lift earnings overall from the previous quarter, it wasn’t enough to save the company’s annual results.

“Uncertainties for global business conditions will likely grow further in 2015 due to the slowing Eurozone economy and financial risks in emerging countries,” said a Samsung spokesperson in a statement, clearly not forecasting a swift turnaround for the troubled company.

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Source:: Mobile App News