Samsung Profits Plunge - South Korean multinational technology manufacturer Samsung has announced on Tuesday that its profit for the third quarter of the year - which ended in September - is expected to decrease by about 60%.
Experts say Samsung has been struggling to keep up its buoyant sales as competition stiffens and demand drops in the tech market. The company has reportedly been forced to introduce more low-end phones in a bid to increase sales. Samsung is also reported to have spent heavily on advertising in the past quarter to boost its market presence.
In Q3 2013, Samsung made a profit of $9.6 billion. But in the third quarter of this year, the company has announced that it expects a profit of only $3.8 billion and revenues of $44 billion. These figures missed the estimates of many analysts by more than a significant margin. Last quarter the company's earnings also fell short of the expectations of analysts at 7.2 billion in profit and 51.4 billion in revenue.
Experts say the introduction of the highly anticipated Samsung Galaxy Note 4 will slightly boost the company's performance in the fourth quarter of the year. The company's new low-end smartphones are also expected to increase its overall shipments - particularly to Africa, Asia and the Middle East.
Some analysts have noted that the company's negative performance is partly due to Apple's launch of the iPhone 6 and iPhone 8 Plus. According to these pundits, Samsung has earned its priced position in the smartphone market partly because of its dominance in producing large-screen gadgets. But Apple's introduction of its latest smartphone and 'phablet' threatens to whittle down the Asian giant's market share.
But Samsung's poor profit return only represents one half of the company's businesses. The component's arm of the manufacturer's establishment has not been affected by these upheavals. Experts say Samsung could increase its net profit by selling some of the phone components that are exclusive to its own line of devices.
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