Samsung woes continue as poor smartphone sales hit Q4 profits
Samsung has announced its worst financial results for three years as the company continued to lose ground in the smartphone and mobile device market.
The South Korean manufacturer revealed that declining revenues from smartphone sales had hit its overall returns, but that profits from its hardware division, which produces smartphone chips and semiconductors, were up.
Overall, earnings from smartphones and other mobile gadgets dropped 64 percent annually in the fourth quarter period from October to December to $1.8bn (£1.18bn), marking the mobile division’s fifth consecutive quarter of decline.
Rise and fall
There was better news for Samsung’s semiconductor and processor divisions, however, both of which reported encouraging returns.
Its semiconductor division’s operating profit jumped almost 36 percent during the quarter to reach its highest point in four years, spurred on by increasing demands as more manufacturers look to produce ‘smart’ devices which can connect to the world around them using the Internet of Things.
Samsung also said it had seen healthy demand for its memory chips, used in servers and handsets including Apple’s iPhone devices, as well as improved sales from its system chips business. It expects to outpace overall industry shipments growth for DRAM and NAND chips this year.
Samsung, which has not released a new flagship mobile device for nearly a year, but is highly expected to announced the Galaxy S6 around this year’s Mobile World Congress event in March, remains the world’s leading smartphone manufacturer, but this title is now under significant threat.
The company said that demand for its smartphones and tablets will continue to fall in the first quarter of this year compared to the last due to seasonal factors.
Samsung says that its mobile business will now focus on increasing sales and improving business performance through new product line-ups, such as the Galaxy A series, ahead of further announcements regarding new products in the coming months.
The company’s disappointing returns news come in sharp decline to its major rival Apple, which yesterday announced record-breaking results, thanks to 75 million devices sold in just three months.
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