Samsung Electronics has seen its profits for the fourth quarter of 2014 fall by 40 per cent, after falling sales of its smartphones, and also of its semiconductors.
Despite the upcoming release of its next big smartphone, the Samsung Galaxy S7, the South Korean technology giant has warned it expects difficulties maintaining profits this year on the same level as 2015.
In 2015, revenue fell £116bn compared to a year previously, and the net profit in the final quarter to December last year was down £1.9bn. The net profit for 2015 was £11.1bn, the lowest it had been for four years.
The Galaxy S6 was released in April 2015, but it failed to compete as well as Samsung hoped it would against Apple iPhones at the high end of the market, and there was also stiff competition from Xiaomi and Huawei, Chinese rivals at the cheaper end of the market.
“It’s showing that [Samsung] are under pressure,” said the Asia-Pacific director of ABI research, Jake Saunders. “About half of their revenue comes from mobile devices.”
“Xiaomi is getting traction in markets like India and Indonesia, which are very large markets for smartphone devices, and it’s also where we see strong growth. The overall market only grew by a little over 2 per cent in 2015 so they are going to have a tough time,” he continued.
It’s not just Samsung that are struggling, however, as Apple has also experienced a slump lately.