Samsung Electronics Co Ltd (KRX:005930) disclosed its earnings guidance for the third quarter 2014 indicating a decline of 60% in its operating profit during the July to September quarter. Further, the company lost sales to its Smartphone rival Apple Inc (NASDAQ:AAPL), which is receiving huge success with its latest bigger screen versions of iPhone 6.
The world’s largest Smartphone maker recorded net sales of 47 trillion Korean won with consolidated operating profits of 4.1 trillion Korean won or $3.8 billion. The earnings guidance gave a clear idea of the slowing down demand of the higher-end Smartphone from Samsung.
The company announced lower operating margin saying ‘Smartphone shipments increased marginally amid intense competition. However, the operating margin declined due to marketing expenses related to aggressive promotions and lowered ASP (Average Selling Price) driven by reduced proportional shipments of high-end models coupled with price decreases for older smartphone models.’
Samsung Electronics Co Ltd (KRX:005930) said in a statement, “The company is preparing new smartphone lineups featuring new materials and innovative designs.” The Smartphone maker launched Note 4 ahead of Apple Inc (NASDAQ:AAPL)’s iPhone 6 launch with a curved screen and it was considered as an attempt to control the dropping large-screen mobile share of the company. According to I’M Investment & Securities Co., the overall shipments of S5 Smartphone fell from 18 million in the last quarter to 12 million in the third quarter leading to lower profit margins.
Earlier, Apple Inc (NASDAQ:AAPL) is likely to record launch weekend sales of up to 12.5 million after its launch in China considering the fact that it sold 10 million devices on its iPhone 6 global weekend release. Apple is likely to launch its next generation iPad on October 16 at the Town Hall Auditorium situated in Apple’s Den in Cupertino, Ca. iPad Air 2 is likely to have a 9.7-inch screen along with a powerful A8 chip with high-end graphics. The device would come with 2 GB RAM and would be available in golden color in addition to its gray and silver variants.
This article has been written by Prakash Pandey and edited by Serkan Unal.