For months now debate has raged as to whether Samsung was going to end the year financially positive. Over the last few quarters the South Korean tech giant has reported losses which to Samsung (and the industry in general) are slightly worrying. In fact, Samsung have reported drops in their profits for the last previous three quarters. Only three weeks ago we reported predictions were already being made that the last quarter (Q3 of 2014) would be even more depressing with a predicted 60% drop from the same period last year.
Well it seems those concerns have been realized as today Samsung have published their figures for the period between July and September 2014 (Q3) and they are not easy reading. Samsung have said their third quarter operating profit has fallen by an annual 60.1% (in line with the prediction) to 4.1 trillion won which equates to $3.9 billion. To hammer home what this means in real terms, this is the lowest quarterly report from Samsung in three years. As such and combined with the two previous quarters of this year it now seems certain that Samsung will be reporting their worst yearly operating profit since 2011.
Its not hard to figure out why this is happening as in the last year Samsung have been attacked on all fronts. Their top-end side of the market is under threat by other flagship devices while Samsung's bread-and-butter markets like China and India are seeing immense competition in recent times from their own home-grown talent and products. With Samsung having to battle at both ends it seems overall their grasp on the smartphone market is significantly being affected. Samsung did state that they expect to see an increase in the fourth quarter of 2014 although this again makes sense when factoring the holiday season as well as the release of the Samsung Galaxy Note 4. However with predictions already being made that the Note 4 will not sell as well as Samsung had hoped, how much of an increase Samsung will see its debatable. Furthermore, even Samsung acknowledge that a large part of their fourth quarter profits will be down to their TV and Memory arms while also noting that the outlook for their Mobile division remains unclear. What is clear is that Samsung at present is facing their worst year in terms of operating profits for awhile.