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Profit for Q3 2014 Predicted to be Samsung’s Weakest Since Q4 2011

October 2, 2014 - Written By Tom Dawson

 

It’s tough being at the top and while Samsung has undoubtedly proven they deserve to be in the position they’re in right now, with quality devices and some of the best marketing around, it seems that staying at the top is proving difficult for Samsung. Earlier this year, the company posted a near 25% drop in profits during Q2 of 2014, compared to Q2 of last year. Now, it’s forecast that Samsung’s profit for Q3 2014 could very well be the worst the company has seen since Q4 2011. It is however, important to remember that these are just forecasts by industry analysts and those familiar with Samsung. The company is due to announce their financial guidance for the months of July to September on October 7th.

Reuters have been told by analysts that profits for Q3 2014 are expected to fall by as much as 45% to 5.6 Trillion Won (roughly $5.5 Billion) which is a dramatic drop from the record-breaking 10.2 Trillion Won for the same period last year. That’s a mean estimate that Reuters have put together from 42 different tips from analysts, but the overall verdict is that while Samsung was resting on its laurels, everyone else has gotten real good at playing catch-up. IBK Securities analyst Lee Seung-woo had said that while we used to “look at the smartphone market from an Apple vs. Samsung framework, but it turns out that it was really Apple vs. Android. Samsung used to take all the profits from Android because its rivals were doing such a poor job. Now there’s very little difference between Samsung and its Android rivals.”

The Galaxy Note 4 is a device that’s already smashed pre-orders in South Korea and there’s no denying that the Galaxy S5 and Galaxy Note 3 were great devices, either. However, it’s not too far from the truth to say that Samsung has spent 2014 iterating on their designs and features of last year, rather than innovating and introducing something truly new. Samsung is a company that clearly isn’t going anywhere, but how Samsung’s profits have fallen over the course of 2014 just goes to show that you can’t keep on going indefinitely. The South Korean giant will have to something soon if they hope to kickstart their growth back to the sort of numbers we’re used to seeing from them, and new products that get people talking about Samsung again is definitely one way to do that.