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| Samsung Profit Dropped 32% Last Year As Smartphone Sales Slowed |
The Samsung Group announced Thursday
that its yearly profit fell for the first time since 2011. The
electronics giant still beat analysts' expectations as its slowing
smartphone sales were buoyed by demand for its computer chips.
Sales of Samsung’s Galaxy smartphones made up two-thirds of
its profit for the last two years, but they will be eclipsed by its
semiconductor business in 2015, according to analyst Lee Sei-cheol from
Woori Investment & Securities. The company announced that its 2014
operating profits were expected to reach 24.9 trillion won, or $22.6
billion, down 32 percent from a year earlier.
In 2012 and 2013, Samsung smartphones outsold those made by
Nokia, Motorola and Apple Inc. However, sales growth stopped in 2014 as
company flagships like the Galaxy S5 and Note 4 failed to ignite the
same consumer interest as previous models, forcing Samsung to slash
prices on older phones to maintain sales.
Samsung was also outsold in the low-end smartphone segment
in emerging markets like China and India, where it was dethroned from
the top spot by Chinese manufacturer Xiaomi. Its third quarter was its
worst in years, but fourth-quarter sales from its semiconductor business
-- which makes mobile processors, solid state drives and memory chips
-- helped it beat analysts' expectations for 2014.
The Korean manufacturer’s smartphone sales are unlikely to grow as quickly as they did in 2012 and 2013, analysts told The Associated Press, and Samsung has said it would eliminate product lines in the future to lower costs.
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