Samsung has suffered a slide in profits year-on-year, reporting a profit of 5.29 trillion won (about US$4.87bn) for the last quarter of 2014, the cream from 52.73 trillion won (approximately US$48.6 bn) turnover. At the same time last year, they reported a profit of 8.31 trillion won (US$7.58bn).
While these are huge numbers showing massive profit, it’s still a shade over a 35% dip, and companies of this size can’t support such dips for so long. The company is looking to a number of things to halt the profit decline and put their quarterly growth back in the black including the growth and rollout of LTE in new markets worldwide.
Samsung’s acknowledging the lackluster performance of their Mobile division in the last year and promises to differentiate and optimise its product line-up to recover:
The IM Division’s Mobile Business, which had weak earnings in 2014, will focus on recovery by differentiating its mobile devices using new materials and designs, while also more efficiently managing costs through, among others, streamlining product line-ups.
It also seems that the Note 4 started to lead a recovery in this area late in the year – and perhaps some more frugal marketing helped:
Meanwile, the IT & Mobile Communications (IM) Division saw its earnings recover, due to increased sales of high-end products, such as the Galaxy Note 4, and a more efficient management of marketing expenditures.
The Galaxy A series was also specifically called out as one of the new product lines to which Samsung is looking to restore its profits, and there is of course an expectation that the Galaxy S6 will be Samsung’s sales leader for 2015. There’s also a reference to a “diversified product portfolio with unique designs” for wearables.
We’ve heard a number of times that the Galaxy S5 hasn’t performed to expectations on sales, and that Samsung’s looking to shake things up with the S6. The reference to “new materials” above sounds like an allusion to the rumoured metal-clad phone we’ve heard is coming at Mobile World Congress.