What seems to be an unimaginable situation for the electronics giant, which dominated the Smartphone market for past several years, Samsung Electronics Co Ltd (KRX:005930) is likely to announce poor financial results tomorrow. Added to the poor financial result is the stiff and sharply rising competition from Apple Inc (NASDAQ:AAPL)’s iPhone 6.
According to Bloomberg, analysts are cutting their profit margins for the company on a regular basis and as per the estimates, the company might lose up to 47% of its operating margin during this quarter and a drop of 15% in its sales. These would be the steepest declines for the Smartphone-maker since 2009. Claire Kim, Daishin Securities Co. analyst, said,
“We all know Samsung’s third-quarter earnings will be pretty ugly. The earlier release of its new phones could be reflected in its third-quarter earnings, it could give them a slight boost.”
In addition to it, the huge success of Apple Inc (NASDAQ:AAPL)’s iPhone 6 at the global level is another reason of worry for Samsung Electronics Co Ltd (KRX:005930). Apple sold as many as 10 million devices on its launch weekend excluding China, which makes this figure much more impressive. The iPhone-maker is going to launch its bigger phones in China on October 17 after receiving required approvals from the Chinese authorities.
Chinese customers would be able to book iPhone 6 starting October 10 for preorders from the company. The Chinese operators providing services to iPhone 6 have offered pre-order schemes for their customers and according to a recent report, China Unicom, China Mobile, and China Telecom have accumulated nearly 1 million pre-orders for iPhone 6. These orders came in within 6 hours of the opening of booking and if the phones sold by the distributors were to be included, it would easily cross the 2-million mark.
Experts are expecting anywhere between 2.5 million to 5 million device sales during the launch weekend in China, which would bring Apple Inc (NASDAQ:AAPL)’s launch weekend sales to at least 12.5 million.
This article has been written by Prakash Pandey and edited by Serkan Unal.