Why Samsung did not impress despite new products?


Samsung, the Korean electronics company, recently announced its Q4 earnings with profits of 6.1 trillion won, failing to meet the analyst’s expectations even after a horde of products being launched in the market.

Samsung has changed its design policies, and has enhanced software to provide more smartphones in the premium range. It has introduced Exynos processors, smartphone models, smart watches, and more this year.

Between October and December, Samsung’s operating profit came in at around 6.1 trillion Korean won or $5.1 billion against 5.3 trillion won last year. With 15 percent increase, this amount still falls short of analyst estimates. The expected profit was around 6.6 trillion won.

Apart from the usual, Samsung also announced Exynos 7 Octa processor in competition to Snapdragon 805, which has proved to be efficient for computing applications whereas Snapdragon has been more preferred for gaming. Exynos 7 Octa processor has been in mass production since February.

In Spain’s Mobile World Congress, Samsung announced Galaxy S6 and S6 Edge, which were listed amidst the top smartphones of the year 2015. Both faced tough competition from Apple’s iPhone 6s. Galaxy S6 and S6 Edge phones are available at a price of Rs 49,000 and Rs. 58,900 in India, respectively. Incidentally, Apple’s iPhone 6s did not work well for the US-based technology major.

Samsung also introduced two speakers from its Wireless 360 range, in June 2015, the R6 and R7, at a price of 400 and 500 dollars each. Launching of the first monitor that allows wireless charging for mobile devices took place in July.

In August, the company announced Galaxy S6 Edge+ at Rs 57,900, which became a hit, credits to its camera, large and clear screen, and different design. Also announced was the Galaxy Note 5 at Rs 59,900 which comes with an S Pen stylus, aluminium body, and an enhanced processor.

Also, the Korean company launched the Galaxy Gear S2, the second in the series of the company’s smart watches at a price tag of $350. The company announced the mass production of 256 GB V-NAND Flash memory.

October saw the launch of the Tizen powered 18.4 inch tablet, Samsung Galaxy View at $599 or approximately Rs 39,000.

Samsung revealed the Exynos Octa 8 chipset promising a 30 percent increase in performance, and an increase in battery life. The chipset comes with an integrated modem, which supports Cat. 12/13 LTE with carrier aggregation for download speeds up to 600Mbps.

It also put forth the Gear VR consumer edition, which broadens the accessibility of virtual reality by allowing users to immerse themselves in new worlds, games and experiences, and is compatible with the Galaxy Note5, Galaxy S6 edge+, S6 and S6 edge.

In the last month of 2015, Samsung unveiled the enhanced Galaxy A series with midrange A3, A5, and A7 smartphones. All three smartphone handset models have Android 5.1 Lollipop as operating system and have dual SIM options.

The A7 has a 5.5-inch screen with full HD resolution of 1080×1920 pixels and packs an octa-core SoC with 3GB of RAM and 16GB of memory storage. A5 has most features similar to A7 with variations like the smaller 5.2-inch display and lower RAM at 2GB.

The A3 is the smallest of the trio with only 4.7-inch display and a lower RAM of 1.5GB. Samsung launched these smartphones in the budget segment in order to retrieve the lost market but with the dominance of new OEMs, it has become a tough task.

Samsung’s last quarterly revenue of 2015 is at 53.0 trillion Korean won against 52.7 trillion won in the same quarter last year. Samsung has made efforts to cut costs and improve profitability but the sales position has not seen much improvement.

Analysts anticipated that the company lost $8.0 billion in market value in 2015 in smartphone sales. The company has continued to feel the impact of lower cost Chinese competitors and a generally poor global economic outlook in the smartphone area.

The losses were partially made up by Samsung’s component and semiconductor businesses, especially flash memory, which also was affected by lower global demand for electronics. Samsung is trying to become prominent by improving their software, one of them being Samsung Pay.

The company started declining in 2014 when their profit numbers fell from 10.1 trillion won in the third quarter of 2013 to 4.6 trillion. The fourth-quarter earnings estimates of 2015 indicate that the company will add total operating profit of about 26 trillion won for 2015, in comparison to 25 trillion won in 2014. Annual revenue descended to 200 trillion won last year from 206 trillion won in 2015.

Actual results are due at the end of January after an external audit.

Vina Krishnan