Samsung Admits Apple Played a Role in their Plunging Profits
Samsung's having a really bad year: In a new report today, Samsung actually admitted to its smartphone profits plunging due to weaker sales and increased marketing costs amid fiercer competition with Apple and budget Chinese rivals. And with the iPhone 6 Plus now on the market, the sales of their Note 4 is going to suffer going forward. A senior Samsung executive also stated that "The thing is that we lack momentum for better earnings for the fourth quarter."
We reported yesterday that Samsung was headed for an ugly quarter with operating profits likely to plunge 47% and sales down 15%. Well, the news was even worse than expected. Samsung actually reported today that operating profit fell by 60% with sales down stronger at 20%.
You could read all about their many excuses for their disastrous quarter here.
Last quarter we reported that "Executives of Samsung Electronics' mobile division returned about one-fourth of the bonuses they received for the first half of this year after the unit posted lackluster second-quarter earnings on slow smartphone sales." If taking away their bonuses didn't get the message across, then I suppose being sent on holiday to North Korea is probably in order (only kidding guys – ha!).
At the end of the day, I must confess that when I think of Samsung's smart aleck ads of late running against Apple, it's just so satisfying to see that no one's really listening. I mean, the whole ideas of these ads are to make consumers turn against Apple's iPhone and run to buy a Samsung Galaxy, right? Yet Samsung Galaxy smartphone sales are down, way down. So who's looking stupid now that the iPhone 6 and 6 plus are rocking the world?
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