Concerns on Smartphone Business: Why Can Not Samsung Electronics Laugh Despite Record-high Performances? | BusinessKorea

Saturday, February 24, 2018

Samsung Electronics’ sales volume of smartphones has shown a negative growth.
Samsung Electronics’ sales volume of smartphones has shown a negative growth.
Seoul, Korea
1 February 2018 - 10:00am
Cho Jin-young

Samsung Electronics announced on January 31 that its IT & Mobile (IM) Division’s sales and operating profit for last year totaled 106.67 trillion won (US$96.0 billion) and 11.83 trillion won (US$10.6 billion), respectively. The figures for the fourth quarter of 2017 are 25.47 trillion won (US$22.9 billion) and 2.42 trillion won (US$2.18 billion).

The IM Division had posted 111.76 trillion won (US$100.6 billion) in sales and 14.56 trillion won (US$13.1 billion) in operating profit back in 2014. However, the figures fell to 103.55 trillion won (US$93.2 billion) and 10.14 trillion won (US$9.1 billion) in 2015 and to 100.3 trillion won (US$90.3 billion) and 10.81 trillion won (US$9.7 billion) in 2016. In the fourth quarter of 2017, its operating profit fell 3.2% although its sales rose 7.9% from a year earlier.

Its sales volume showed a negative growth, too. Specifically, Samsung Electronics sold 86 million mobile phones and seven million tablet PCs in the fourth quarter of last year whereas the figures had been 90 million and eight million in the fourth quarter of 2016.

According to Samsung Electronics, this can be attributed to a rise in marketing expenses and a decline in the sales volume of inexpensive smartphones as well as the release of the iPhone X and the less-than-expected performance of the Galaxy Note 8.

Samsung Electronics is planning to beef up its AI assistant Bixby in order to tide over the situation. In addition, it is going to improve the average selling price of its products, expand the features of its flagship smartphones to its less expensive smartphones, and improve its profitability by means of product lineup efficiency enhancement, productivity enhancement, etc.

This year, Samsung Electronics unveils the Galaxy S9, its flagship phone for the first half of this year, at MWC 2018, which is scheduled for late February. The product is likely to become available in the market in late March. Samsung Electronics is expected to release a foldable smartphone within this year as well. The phone is likely to come with dual displays.

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