Samsung Electronics has predicted a 60% fall in profits for the third quarter of 2014 compared to Q3 2013.
The Korean monolith has stated that it expects operating profits of ©4.1 trillion (£2.5 billion) for the period of July to September’s end. This is considerably lower than the ©5.2 trillion (£3 billion) analysts previously predicted.
Despite an incredibly deep and diverse portfolio of businesses Samsung’s mobile division is its largest, and a slowing of Galaxy smartphone sales is to blame. Thanks to increased competition from other Asian brands like Xiaomi, Lenovo, Micromax and Oppo, Samsung has lost significant grip in its stranglehold of the developing market. Quarterly device sales generated ©47 trillion (£27 billion), coming up short of the ©50.3 trillion (£29 billion) estimated by analysts.
In spite of such negativity from Samsung itself, shares still rose roughly 1.6% in the Asian stock market – most likely due to the impending release of the Samsung Galaxy Note 4. There’s a strong chance that the company’s flagship phablet could outperform its more conventional Galaxy S5, particularly in Asia.
Samsung released a statement accompanying the predictions: “Smartphone shipments increased marginally amid intense competition. However, the operating margin declined due to increased marketing expenditure and lowered average selling price.”
Full financial results will be made public later this month.