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Samsung Q3 2014 sales was down

by on31 October 2014

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Didn’t sell enough high end phones

Samsung has had a bad quarter and its dependence on smart phones is to blame. Back in Q3 2013, the company had a record $9.6 billion quarter while this year it only managed to make $3.9 billion during the same period.

Samsung operates as three big entities CE Consumer Electronic group, IT & Mobile communications and DS (Device Solutions) group. Compared to Q2 2014 Consumer Electronic group fell 11 percent, mobile was down 15 percent while the Semiconductor part of Device Solution group grew one percent and memory business had a 15 percent increase. Digital Panel the group had a one percent down quarter to quarter.

Mobile sales in Q3 2013 were at 35.66 KRW Trillion while it managed to fall to 23.52 KRW Trillion in Q3 2014. Samsung explanation what happens goes like this "Despite slight growth in shipments, earnings declined QoQ as ASP decreased due to weak smartphone product mix and sales decrease put pressure on the cost structure".

Shipment growth was driven by mid to low end products which led to decrease in average selling prices and the profits. Samsung confirms that the high end phones were not selling as well as last year but the Note 4 did help increasing the ASP but it came too late in to the quarter to make a bigger impact.

Samsung's expects to increase phone and tablet sales in Q4 2014 as this is a high season or year-end seasonality. Christmas makes all sales spike and Samsung warns that increase competition and the price competition will intensify.

It looks like Samsung didn’t impress with Galaxy S5 and that it will had to put an extra effort to make Samsung Galaxy S6 more desirable. HTC One M8 is probably the best looking android phone in the market and has a 2560x1440 screen and quite low price; it puts a lot of pressure on both S5 and Note 4.

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