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    Administrator dgstorm's Avatar
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    Samsung's Recent Financials Reveals Reduced Profits Due to 'weak demand' on Lower-End


    Sometimes, when it rains it pours. Samsung is experiencing that old adage right now. Not only was one of their Brazilian factories robbed, but their profits are still slipping.

    That comes straight from Sammy's latest financial report. Apparently, "weak demand" for their lower end products has created a glut of excess inventory for the company. Because of this, they have needed to spend even more than usual on their already gargantuan marketing budget.

    Interestingly, their guidance suggests that much of their financial trouble is caused more by fluctuations in currency than anything else. Still, there are several factors plaguing the company right now, and it's never a good thing to hear "weak demand." Here's a quote with more details,

    The Korean won, which has been virtually unstoppable in its rise against the greenback (and most other currency) this year
    Over-delivery of smartphones led to a glut of devices in China and Europe, where increased competition on the low end edged out Samsung’s offerings
    In China in particular, Samsung’s 3G products come at an awkward time, as Chinese consumers save up for the rollout of 4G long-term evolution devices
    People don’t buy tablets as often as they do smartphones, and the very success of Samsung’s phablets eats into tablet sales
    Samsung spent even more than usual on marketing in the second quarter
    Their record-breaking profit pace wasn't sustainable forever. Could this also be a small sign of the natural market contraction created when a product becomes so ubiquitous it creates saturation?

    Source: WSJ Digits

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    Junior Member pexpress's Avatar
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    in April the analysts expected that Samsung focus more efforts on low-end devices where Chinese models are progressing, to offset slower sales in high end devices, but now I wonder what samsung should do




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    Last edited by pexpress; 08-14-2014 at 06:12 AM.

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    Administrator cr6's Avatar
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    Quote Originally Posted by dgstorm View Post
    Their record-breaking profit pace wasn't sustainable forever. Could this also be a small sign of the natural market contraction created when a product becomes so ubiquitous it creates saturation?
    I think this sums it up nicely.
    Funny how internet opinions spread like wildfire these days. So many people seem to think this is the beginning of the end for Samsung. These numbers were bound to happen eventually. Especially when today's smartphones are easily lasting 3-4 years. The need for the latest and greatest device to handle your everyday computing isn't as necessary as it was 5-6 years ago.

    I think this is a good turning point for Samsung (Especially once the new iPhone is released) for them to change their tactics. People expect more for less these days, and seeing how level the playing field has become, I think it's time for them to focus more on quality instead of quantity. It will be interesting to see if Apple truly releases something innovative this year, or merely throws higher specs at the problem they're currently facing. Regardless, it should be interesting to see how it all plays out.

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    Junior Member pexpress's Avatar
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    I agree, for example samsung should give more importance to material like aluminium instead of plastic

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    Senior Member jshaw42's Avatar
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    ?

    Is there no news about Samsung lately?
    Galaxy S4 (SCH-R970) on U. S. Cellular 64 gb SD card

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