As Samsung already managed to announce during the announcement of financial results for the 2nd quarter of 2014, this time there was a decrease in net profit by 19,6% compared to the previous year, thanks to which the company earned 6,1 billion US dollars this quarter, while last year it was 7,5. 8,9 billion dollars. At the same time, there was a decrease in sales by 50,8%, thanks to which the company had total sales of almost 2011 billion US dollars. This is the first decline in net profit since the third quarter of XNUMX.
Samsung announced that it had miscalculated its expectations, which led to a large excess of products in stock. Samsung feels strong competition as a problem not only in the USA, where it competes primarily Apple, but especially in China, where people are starting to prefer domestically produced mobile phones, which often offer high-end hardware at an excessively low price. This is exactly what Samsung would like to do, and according to Kim Hyun-Joon, it plans to start selling fewer models in the country, which will offer some functions from high-end phones, but will compete with the Chinese low-end and mid-end (ie around $200 ). Big screens, which are celebrating success in China, should play a key role.
At the same time, Samsung decides to effectively save on the production of high-end phones by saving on R&D, or otherwise on research and development, and better production management will also help it to save. Samsung finally announced other less encouraging news regarding financial results. Samsung's operating profit for the quarter fell 24,6% from last year to $7 billion. There was also a decrease in the gross margin from 17,7% to 15,5%. The gross margin is thus the lowest since the fourth quarter of 2011.
*Source: Wall Street Journal
