Samsung’s Q2 Profit Dips 31% thanks to Chinese Startups

July 31, 2014 - Written By Alexander Maxham

We already know this was coming. In fact, Samsung was right on the money when they forecasted it a little while ago. But they have seen a 31% dip in profit, now this is Samsung Mobile, not the entire company, just the mobile part of the Korean tech giant. The reason for the dip? Well there are two reasons. One is the Chinese competition in the low-end and mid-range smartphone areas (not to mention Motorola’s Moto G and Moto E), as well as the saturated smartphone market. As announced today operating profits for Samsung Mobile fell from 6.43T won ($6.28B) to 4.42T won ($4.32B). Now that’s still a healthy amount of profit, heck I’d love to bring in that much profit in 3 months. 

Evidentally, Samsung Mobile’s SVP Kim Hyun-Joon will be addressing the fact that Chinese competitors low-end and mid-range smartphones have bested them. So maybe that means we’ll see some more mid-range devices that are better spec’d and better priced? Hopefully. 

“We will respond more aggressively to meet demand in the Chinese market […] in the latter half of this year by introducing more products with better specification as well as better price competitiveness …”

Samsung’s marketshare is still huge, and they are way out in front of their competition, and they are still one of the few OEMs actually making money. So it’s not all bad news for Samsung. And this could be why they are looking to launch the Galaxy Alpha pretty soon, ahead of the Galaxy Note 4. Samsung has seen some tough competition in Asia from Xiaomi, Huawei, Meizu, ZTE and Even OPPO. There are plenty more over there, but those are the popular ones we hear about over here.

While it’s never good to see that big of a drop in operating profits, I don’t think it’ll be a huge deal for Samsung. At the end of the day they will still rake in a ton of money and sell a ton of smartphones. They are just beginning to feel the effects of a saturated smartphone market.