Early financial forecasts suggest that Samsung could be in for another year of smaller profits, although the situation may not be as bad as in 2014.
Speaking in a recent interview, Xiaomi’s Hugo Barra explained how the company goes about keeping its costs low enough to offer such competitive prices.
Average smartphone profits for Android hardware manufacturers have roughly halved over the past year, despite huge growth in global shipments.
Having raised $1.1 billion in its latest round of fund-raising, Xiaomi has been valued at $46 billion, making the Chinese company the most valuable technology startup around.
A regulatory document filed with the Shenzhen Stock Exchange shows that Xiaomi only made $56 million profit last year, a fraction of the amount reported last month.
According to sources close to Samsung, the company has dismissed dozens of executives from its mobile division, although top executives retain their posts.
Research conducted by Strategy& places Samsung as the second largest R&D spender in the world, and the largest in the consumer electronics industry.
After rumors of a reshuffle, Samsung’s top executives will retain their existing roles, including J.K. Shin, the head of the company’s mobile division.
Samsung has announced that it intends to buyback $2 billion worth of shares in order to stabilise the company’s share price and boost value for investors.
In an attempt to return its mobile division to a profit, Sony will cut its smartphone product line-up and impose cost cutting measures next year.