Apple is moving in for the kill
Samsung’s third quarter 2014 earnings are likely to discourage investors as Samsung faces intense competition from both high-end and low-end competitors at the same time. According to the Wall Street Journal, Samsung is expected to announce a quarterly operating profit drop of up to 62 percent in what may be its fourth consecutive quarterly decline.
What is the future of Samsung in terms of phones?
Though it may see a marginal increase in smartphone shipments, Samsung’s operating profit decline may be the result of lower handset selling prices and increased marketing costs as smartphone competition escalates.
Apple is maintaining their strong position in the arena of high end smart phones while Chinese competitors are in full swing entering in the low end market (with much success). The combined attacks on Samsung’s space can only mean one thing, that Samsung will have to reinvent themselves and create higher appeal for their phones and the operating system they use in order to stay competitive in the future. Currently the iPhone reigns supreme and the single most popular high end smart phone in the world.
While its mobile device division struggles, Samsung’s components business is expected to increase 10 percent over the coming year, accounting for more than 40 percent of operating profits in 2015.
One of Samsung’s main component customers is Apple, although the iPhone maker has cut back significantly on its usage of Samsung parts. One major move away from Samsung came with the main A8 chip used in the iPhone 6 and 6 Plus, with Apple turning to TSMC for the first time for chip production.
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