By Abel Muhatia @abelmuhatia
Samsung Electronics has reported a 39% decrease in profit due to heavy smartphone competition from rivals such as Apple and other key manufactures.
This is according to its first quarter earning reports Its performance is more or less equal to that of apple that posted its second largest quarterly earnings of all time earlier this week.
The South Korean company reported net profit of 4.63 trillion won (about $4.35 billion), a 39 percent drop from… the 7.49 trillion won it reported a year ago.
This fell below analysts’ expectations, as well as Samsung’s own forecast for operating profit of 5.9 trillion won. Revenue slipped 12 percent year-over-year to 47 trillion won.
Samsung Electronics’ smartphone sales have been hurt by competition with Apple and a slew of smaller Android device makers, but Samsung sounded an optimistic note, predicting a recovery in the second-quarter thanks to its new Galaxy S6 and Galaxy S6 Edge.
The company also said in… its earnings calls that China and India will drive demand for its smartphones this year, even though it faces stiff competition from makers like Xiaomi and Micromax in those markets.
Samsung Electronics’ mobile unit saw its first-quarter operating profit plunge 57 percent year-over-year to 2.74 trillion won. Its operating profit margins climbed 10.6 percent quarter-over-quarter, in which the company attributed to stronger sales of its mid-range smartphones.
The company said it plans to continue boosting margins by spending less on marketing.
In addition, the company believes its second-quarter earnings will be sustained by its semiconductor business, as it sells memory chips to other smartphone manufacturers that are about to launch new flagship smartphones.
Additional and key Information from techcrunc.com