Samsung's profits for its mobile phone division more than halved in the first quarter of 2015, compared with the same period last year. However, the firm is hoping that the recently launched Galaxy S6 smartphone will boost next quarter's financial performance.
For Q1 2015 Samsung’s IM (IT and mobile communications) division reported operating income of ₩2.7tn ($2.6bn) compared with ₩6.4tn in the same period last year. However, this was an increase from the ₩1.96tn in Q4 2014.
Overall these profits were derived from sales in Samsung's IM division for the quarter of ₩24.99tn, down from the ₩31.37tn posted in the same period last year.
This slump contributed to an overall fall in sales at Samsung by 11 percent quarter on quarter to ₩47.12tn and were down from the ₩53.68tn posted in the year-ago quarter.
Overall profits for the quarter were ₩5.98tn, up a small 0.69 percent on Q4 2014, but down a huge 30 percent from the ₩8.49tn posted in Q1 2014.
Samsung is confident that the launch of the Galaxy S6 in April will help ensure that its Q2 revenues and profits are much higher.
“Expect earnings improvement led by increased high-end sales with S6 global expansion, and smartphone shipments to remain at a similar level due to decreased mid/low-end sales,” Samsung said in its earnings release.
However, the firm added that marketing expenses in Q2 will also increase owing to the launch of the S6.
The company also acknowledged that the smartphone market is shifting and posing challenges to its position.
“Expect product/marketing competitions to intensify amid a slowdown of smartphone growth,” the earnings release said.
The Galaxy S6 has had positive reviews since it launched. V3 awarded the smartphone a coveted five-star review, describing it as the best Android handset on the market.
Samsung’s rather gloomy results and outlook for the future contrasts with Apple's. The firm revealed on Tuesday that iPhone sales reached a staggering 61 million in its most recent quarter, helping to generate overall revenues of $68bn and profits of $13bn.
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