Samsung announces its first quarter profit plunged 39 percent

South Korean technology giant Samsung Electronics Company says its net incomes narrowed 39 percent in first quarter of year as consumers also show favour to other mobile phones

Updated Jul 28, 2015

Samsung announced on Wednesday that its profit remarkably decreased in comparison with the last year’s January-March period during which the company had earned 7.49 trillion Korean won ($7 billion).

This year Samsung says it received a 4.63 trillion won ($4.35 billion) in the same period that signifies almost 39 percent decline in its net revenues due to 12 percent drops in market sales.

The company claimed that drops in sales and income could be regarded as consumers’ changing behaviours in mobile phone market in which some other big companies like Apple and LG have been dramatically augmenting their shares.

Although the Korean giant sold more smartphones in this period than Apple according to mobile technology experts, the company started to lose its comparative advantage in the high-end market to the American firm since Apple has been offering models with bigger screens last fall.

Meanwhile, The Apple Inc which makes iPhones also released on Tuesday has sold almost 61 million smartphones in line with Samsung’s 81 million sales during the same quarter.

However, Samsung believes that its sales and incomes will be expanded again in the next quarters as the company launched the Galaxy S6 and S6 Edge models with curved screens last month. But the increasing trends in marketing expenses are also expected to pressure on Samsung’s profit maximisation and margin.

The company especially targets to recover its market share in the big-size consumer countries like China where it had lost its leading position to Apple and Xiaomi.

Founded in 1938, the South Korean electronic giant has come to prominence by the beginning of new millennium as it contributed incontrovertible values into South Korea’s nanotechnology-based dynamic economy.

The company mainly focuses on mobile technologies together with electronics, information technologies and some other heavy industries. Samsung had become the world’s largest phone maker by overtaking Nokia company in 2012.

Source: 
TRTWorld and agencies