Past
For the first time in two years, Samsung posted a drop in profit. In the last quarter of 2013, the Korean tech giant raked in about $7.8 billion which is nothing to sneeze at. For the same period in 2012 though, the company posted an operating profit of $8.27 billion. While profit is still profit, could this spell trouble for Samsung down the line?
Present
On top of that profit drop, the company is expecting slower sales for their smartphones and tablets during the current quarter. The reasoning behind the projection is “seasonality”. It is believed that a new flagship phone is in the works for Samsung so buyers are putting off their purchase and instead just wait for the SGS5’s (Samsung Galaxy S5) release.
Future
What comes in threes? Good things, bad things, blind mice, and Samsung’s woes apparently.
Samsung is the current market leader in China and India, two huge Asian markets but their days on top of could be numbered. In China for instance, Samsung’s toughest opponents (Lenovo, ZTE, and Huawei) are offering affordable phones and tablets geared towards the under-$100 pricing tier. This part of the market is only going to get bigger according to studies.
More and more people are expected to buy their first tablet or smart phone this year which means the sale of cheap phones is on the rise. If Samsung decides to slash prices to be competitive, it would certainly cut their profits even more.