Samsung is struggling under the weight of the iPhone 6’s popularity and budget smartphones, as the company reports that its profits have dropped by a massive 60%.
The South Korean company revealed that its quarterly profit sits at 4.1 trillion ($3.8 billion) won, which falls well below analysts’ expectations of 5.2 trillion. It also marks its lowest profit in more than three years, dropping 60% from its 10.2 trillion earnings this time last year.
Also See: Why are Apple Users Refusing to Switch to iOS 8?
The popularity of the iPhone 6 and iPhone 6 Plus, which recorded record launch sales for Apple, are pegged as being partially to blame for Samsung’s fall from grace, as Apple moving towards devices with larger screens therefore muscling in on a territory Samsung has dominated with its Galaxy series.
Though Samsung did not provide details of earnings throughout each sector, it has been stated that while smartphone shipments marginally increased, higher marketing costs and lower retail prices for its high-end devices have dramatically impacted upon its earnings. That Samsung pushed a great deal of money into marketing only to receive slightly higher numbers of shipments in return also doesn’t bode well for the company.
The company also found that budget rival devices in China hurt its profits significantly, as did its inability to shift older 3G units as the region moves to 4G LTE technology. Samsung released a statement saying that it “cautiously expects increased shipments of new smartphones and strong seasonal demand for TV products.”
Image Credit: TechCity
