Samsung report drop in first quarter profits despite outselling Apple

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Samsung Electronics Co. announced that its net profits in the first quarter plummeted by 39 per cent as consumers preferred the larger iPhones. The preference for iPhones means that Samsung’s mobile division earned less than half of what it earned last year.

The South Korean company said its net profit for the first three months of the year was 4.63 trillion won ($4.35 billion). The sum was much lower than the predicted profit of 4.97 trillion won. A year earlier, the figure was 7.49 trillion won.

It is, therefore, surprising that during this quarter Samsung is estimated to have sold more phones that Apple. Strategy Analytics said Samsung has shipped 83.2 million smartphones compared to Apple’s 61.2 million and captured almost a quarter (24 per cent) market share in Q1.

However, comparisons with last year tell a different story. Apple’s output of 61.2 million marks a 40 per cent increase from the same time last year whereas Samsung’s output signifies a 6 per cent drop, according to Counterpoint.

The data shows Apple’s desire to satiate the increase in Chinese consumers’ demand and challenge Samsung’s dominance in Asia. Apple’s larger iPhones,6 and 6 Plus, produced to challenge Samsung’s own large Galaxy S series phones seem to have done exactly that.

The larger iPhones are becoming more and more popular in China, and Apple has gone on to sell more smartphones in China than in US for the first time.

“Samsung continued to face challenges in Asia and elsewhere, but its global performance has stabilized sufficiently well this quarter to overtake Apple and recapture first position as the world’s largest smartphone vendor by volume,” said Neil Mawston executive director at Strategy Analytics.

 

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