Reports are coming out stating that Samsung is likely to have disappointing earnings for the second quarter of 2014. The earnings are expected to decrease due to smaller-than-expected shipments of mobile devices due to increased competition from global rivals.
Samsung’s mobile business section accounts for more than 60 percent of their overall profit but also contributes heavily to the company’s losses with declining phone and tablet shipments.
“Samsung’s combined sales of smartphones are expected to reach 79 million units, down 10 percent from the previous quarter.” – Cho Woo-hyung, an analyst at KDB Daewoo Securities Co.
Samsung’s share in the world’s smartphone market will reportedly drop to 30 percent from 34 percent compared to the first quarter last year. It is estimated that Samsung will post an operating profit of around $7.74 billion in the April-June period, down from previous periods.
Sales of the Galaxy S5 are down 25 percent with Samsung expected to ship 15 million units rather than the earlier projections of 21 million. Considering Apple reportedly sold 43.7 million units during their second fiscal quarter, this is a massive disappointment.
“According to our forecast, smartphone and tablet PC shipments have fallen at least 10 percent and approximately 20 percent from the preceding quarter, respectively.” – HI Investment & Securities analyst Song Myung-sup.
Not everything was bad, as analysts do expect some areas of growth for Samsung, with the launch of the Galaxy Note 4, wearable devices and a solid chip business.