Samsung Expects A Decline In Profits From Q1 2014
Samsung is expected to make operating profits of 8.4 trillion Korean Won in the first quarter of the year, which is approximately $7.9 billion. This is a 4% decline in profits compared to the same period last year, so it’s clear that the company is not having the best of times in the industry.
Samsung’s profits in Q4 2013 were also down by 6% compared to the same period in 2012, so it seems like there’s a pattern at play here. However, the Korean manufacturer will hope to salvage some of those lost profits in Q2 2014 as the Galaxy S5 officially launches in the markets this week.
Samsung spends billions of dollars in marketing as well, which might go down this year to make up for the declining profits. Analysts aren’t expecting the Galaxy S5 to be a game changer in terms of sales, but thanks to the company’s midrange offerings, the profit decline doesn’t look as bad.
The Galaxy S5 has built up enough interest among customers from all over the world including the U.S., so it should be seen if the demand will translate into sales. Pricing will definitely play a crucial role in the success or failure of the new Samsung flagship.