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Samsung Predicts Challenges In 2016 Following Lower Q4 Earnings

January 27, 2016 - Written By Justin Diaz

Much of the technology industry has been posting fourth-quarter earnings recently, with Facebook and Qualcomm both having posted their fourth-quarter earnings earlier this afternoon. Today, Samsung has shared details of their Q4 earnings that according to the company has led them to predict a challenging year ahead in the smartphone market. For the fourth quarter of 2015, Samsung has seen operating profits of 6.14 trillion won which is equal to $5.05 billion. This comes from a total of 53.32 trillion won in revenue over the same three month period which ended as of December 31st, 2015.

Following their statements on 4th quarter revenue and profits, Samsung predicts that this year will be a bigger challenge for them in the smartphone market due to a few different factors which include primarily weaker device sales from 2015. While Samsung’s Q4 earnings have dropped compared to the earnings from the previous quarter last year, the overall year over year operating profits are up as they have increased by about 16.2 percent compared to the same time in 2014, which showcases that Samsung is still doing well overall. Having said that, Samsung believes they are still likely to see a lower forecast on profits and smartphone sales this year, but if that’s the case they may not be the only ones as both Apple and Qualcomm both saw lower earnings this quarter as well.

In addition to a strong year over year figure, Samsung also saw positive shipments of the Galaxy Note 5 and low-end smartphones as well as tablets. While smartphones may be a tough market for Samsung in 2016, it won’t be the only market they draw profit from with a big focus this year being on products that fall under the smart home and the Internet of Things category. A gloomy picture of smartphone sales will have to push Samsung to attempt for greater profit from those areas, as Samsung will likely continue to see increased competition from Chinese phone vendors who are offering devices with better and better hardware at a lower cost, basically undercutting competitors. Wearables such as fitness trackers and smartwatches will also be an area with potential for Samsung, as will the Gear VR as the virtual reality market continues to heat up this year.