Samsung profit plummets on weak smartphone sales

Mirroring Apple, Samsung sees weak demand in 2016

Weak demand for mobile phones and display panels pushed down Samsung's profits last quarter, and the company doesn't expect much improvement this year.

Revenue for the fourth quarter was 53.3 trillion won ($US45.5 billion), up just 1 per cent from a year earlier, Samsung announced Thursday in Seoul. Net profit plummeted 40 per cent to 3.2 trillion won.

A day earlier, Samsung's biggest rival, Apple, said it too was seeing weaker than expected demand for handsets. The Cupertino company reported iPhone sales that were almost flat and forecast its first quarterly revenue drop since 2003.

Samsung isn't expecting much better. It sees a difficult environment in 2016 characterised by slowing IT demand.

"It would be a challenge to maintain 2016 operating profit levels," said Kim SangHyo, Samsung's vice president of investor relations, in a conference call with analysts.

A weak macro economy around the world will hurt business in the first half, but things should get better in the second half, the company said.

Sales in Samsung's key mobile division fell 10 per cent in the quarter to 24 trillion won. That was the result of an earlier pile up of unsold phones at retailers, and the fact that Samsung sold fewer high-end phones and more that were lower priced.

Samsung doesn't divulge the number of smartphones it sells, preferring to announce total sales of all phone types. That figure was 97 million last quarter, with smartphones accounting for around 85 per cent.

For 2016, it expects the mobile business will see single-digit growth due to tepid demand for new smartphones and tablet PCs.

Samsung's semiconductor and display panel operations - it's second-biggest business area - was the only good performer last quarter. Sales rose 11 per cent year-on-year to 19.7 trillion won thanks to healthy demand for flash memory chips and continued demand for mobile and server DRAM.

But the display business suffered due to weak demand for LCD panels. Samsung hopes stronger demand for OLED panels will help results in future.

The high-profile consumer electronics business saw sales drop 3 per cent to 13.8 trillion won, although profits jumped to 0.82 trillion won.

Join the PC World newsletter!

Error: Please check your email address.

Tags samsungApple

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Martyn Williams

IDG News Service
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?