Samsung profits decreased last quarter, reaching $4 billion, a 49% drop since the same quarter last year. Android Authority says that more people than ever own Samsung smartphones. “The problem is that the markets where Samsung has the strongest presence are heavily saturated, leading to a fall in sales.”
Samsung’s huge market in Western Europe, Japan, and the U.S. are now the slowest growing markets. The smartphone boom in early 2010 led to a huge spike in Samsung sales, but because their smartphones are well-made and long-lasting, Samsung owners aren’t seeing a reason to upgrade. The fact that newer Samsung phone models aren’t too different from older ones is not giving consumers a reason to spend the money.
While Samsung had a bad quarter, LG reported record sales, generating a $450 million in profit. This rise comes from LG’s chairman’s decision in 2011 to focus on the smartphone market.Their productions, the Nexus 4 and 5 for Google, were extremely successful. LG has become innovative, pushing advances like their quad HD display in the LG 3G, without letting prices get too high.
Lenovo reported strong sales in Asia, the Middle East, Africa, and their presence in the United States is becoming noticeable. Their record sales have given them the ability to purchase Motorola from Google.
Samsung profits fall because their prices don’t. But what about Apple, who continues to have large price tags and is still enjoying relatively huge margins? Apple has the incomparable brand loyalty and a ‘real ecosystem’ around its hardware, helping boost profits. Samsung has a solid brand thanks to the Galaxy line, but it doesn’t seem to be sturdy enough to keep sales up when the market is drenched. It’s easier for Samsung fans to switch to another Android phone than it is Apple fans to Android.
Perhaps Samsung profits will find a way to maintain their status level as Apple has. If not, Lenovo or LG could be the next companies to dominate the smartphone market.
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