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Samsung profit plunge

January 29, 2015

The world's leading mobile handset maker Samsung reported its first annual drop in profits in three years due to disappointing earnings in its mobile unit. It comes after rival Apple reported record profits on Tuesday.

https://p.dw.com/p/1ESTo
Mobile World Congress in Barcelona Samsung Galaxy S5
Image: AFP/Getty Images

South Korea's Samsung may lose its crown as global smartphone champion to rival Apple, after posting a 64-percent plunge in 2014 fourth-quarter profit in its cellphone division, when compared with the same period the previous year.

Overall, the firm's fourth-quarter net profit was 5.35 trillion won ($4.93 billion), down 27 percent compared to the same period last year. Third-quarter profits announced in October were down by nearly half compared to the previous year.

For the full year, the tech giant recorded a net profit of 23.4 trillion won ($21.45 billion) in 2014, down 23.2 percent from a year ago and the first decline since 2011.

The company's semiconductor division cushioned the fall in earnings, with operating profit there rising 35.7 percent to 2.7 trillion won in the last quarter of 2014.

Samsung said it expects sales of its memory chips - used in handsets as well as other systems - to remain strong. In its mobile division, it faces stiff competition from Apple, which posted record profits and sales on Tuesday, due to sales of its popular iPhone models.

Samsung pins its hopes on the launch of its next flagship Galaxy S6 high-end smartphone, due to be released around March. Recently, sales of the Galaxy models have suffered, as Apple's iPhones are muscling in in the high-end market. Samsung's cheaper models are also facing headwinds from Chinese competitors such as Huawei, Xiaomi and Lenovo.

ng/jr (Reuters, AFP)