Samsung Reports A Drop In Profit, But Remains Optimistic About The Future
Samsung has reported a drop in its profits in the first quarter (running up to the end of March), but the company said it has good reason to believe that it would be back on track soon.
Samsung's operating profit fell 3.3 per cent compared to the same quarter last year, dropping to 8.49tn Won (£4.85 billion), pretty much exactly what Samsung had previously predicted. However, sales were up 1.5 per cent to 53.68tn Won (£31 billion). Net profit was also up 5.8 per cent to 7.57tn Won (£4.35 billion).
The dip in operating profit is due to the much talked about slowdown in high-end smartphones which manifested at the end of last year, as more consumers look towards budget handsets (which are increasingly more sophisticated at the cheap end of the market – just look at the Moto G, which has been a storming success in the UK of late).
Apple's iPhone hasn't suffered a similar fate at the premium end of the market, with Cupertino's latest fiscal figures showing that iPhone sales were up strongly, driving a record quarter with almost 44 million units shifted.
However, another iPhone isn't imminent, and Samsung's higher-end takings will doubtless have been affected by a slowdown in the number of folks buying the Galaxy S4, in the face of the launch of the Galaxy S5.
Samsung isn't downbeat about the future, of course, and according to the Financial Times, it expects profits to return to more healthy figures soon. Samsung cited an increasing demand for memory chips and premium televisions as good indicators for robust future results – with the World Cup on the horizon, purchases of new TVs are expected to rise considerably.
Naturally, the launch of the Galaxy S5 isn't going to hurt Samsung's income, either. The device has been very positively received overall (you can check out our review here), and will rake in a considerable amount of cash over the spring and summer.
Samsung also just announced the Galaxy K Zoom this morning, although that more niche model won't make nearly as much impact as the S5, of course.
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