Company hopes for Christmas windfall from wearable devices as consumer demand increases
Samsung has announced a fall in quarterly profits as its smartphone business suffered in an increasingly crowded marketplace.
The South Korean company, the world’s largest smartphone manufacturer reported that profits fell 60 percent to 4.1 trillion won ($3.8 billion; £2.5 billion) in the three months to September.
The firm reported that this fall was down to the average price of smartphones falling due to a rise in mid-range devices, as well as increased competition from the likes of fellow Android smartphone manufacturers LG and Lenovo, as well as Apple, which released the iPhone 6 and 6 Plus within the last quarter.
However, it did report higher tablet sales compared to the previous year, thanks to the Galaxy Tab 4 series and the Galaxy Tab S, and confirmed that it expected growth in both smartphones and tablets in the run up to Christmas.
“Although the company anticipates a demand growth for the recently launched Galaxy Note 4 and new middle-end smartphone models, uncertainty remains,” Samsung said in a statement, adding that it expects an earnings increase in the next quarter due to seasonal demand for new products.
The company will also be hoping for growth in its wearable technology division, especially following the publication of research today that estimates the market will be worth over £100 million to UK retailers this Christmas.
In a survey of retailers across the country, the company found that over a million wearable devices are expected to be sold across the UK this Christmas as consumer demand rises, a 182 percent rise from last year and far ahead of other major European markets such as Germany or France.
The majority of these sales will come from fitness and activity trackers as health-conscious shoppers drive up demand for devices such as Samsung’s Galaxy Gear Fit.
“As the benefits wearable technology can offer become better understood, it is natural that the sales within this sector will grow and we are delighted to see predictions of 121 percent growth and sales reaching €395 million in the UK alone by the end of this year,” said Andy Griffiths, president of Samsung UK & Ireland.
“At Samsung, we are passionate about bringing to market products that enhance peoples’ lives and hope that as we continue to innovate in the exciting wearables space that our products will continue to excite and engage people.”
The company recently claimed that a lack of ‘smart technology’ means that the UK economy is losing £9.25 billion a year because consumers and businesses are failing to get the most out of devices such as smartphones and connected devices. UK businesses stand to lose £5.6 billion over the next 12 months unless adoption is accelerated, with Samsung claiming each firm could save an average of £81,000 if smart technology was rolled out in every department, but found that one in ten had not deployed any such innovations.
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