Samsung Q2 2014 earnings were revealed in South Korea on Thursday, and though the company made a net profit 6.25 trillion Korean Won ($6.1 billion), the numbers also represented a stark decline of 19.6 percent from last year’s yield.
In a statement, Samsung said that the weak quarter was an indirect result of stagnant demand for smartphones and tablets, which in turn led to increased marketing expenditures to reduce inventory. “Amid low seasonality, smartphone demand remained flat [quarter-over-quarter] while [it] declined slightly QoQ for Tablet,” a Samsung presentation read (PDF). Samsung is a smartphone giant and it ships endless phones all over the world, and the company wrote that “slower demand for mobile devices also impacted Samsung’s logic chip business or System LSI.”
In addition to the turtle market growth, Samsung also said that the appreciation of Korean Won played a vital part in causing loss to some of the company’s profit. As the Korean won strengthened, Samsung was able to bring back less of the revenue it made off consumers in foreign markets.
Samsung’s second quarter results press release was wary about the future, stating that “the second half of 2014 will remain a challenge,” and “prospects for growth remain unclear as competition over global market share intensifies in the mobile industry.” Still, the company does expect to see growth in consumer electronics next quarter, potentially spurred “by shipments of premium TVs with curved and UHD features.”
Samsung also mentioned that in the second half of the year it would “focus on releasing new premium mobile devices and a new flagship model in the large screen category, along with new mid-to-low-end models with more advanced features and competitive pricing.” Analysts told that Samsung may have to focus on creating more sub-$200 devices, as well as focus on ways to decrease the costs of making its further high-end phones. In its press release, Samsung also promised “a more diverse product portfolio” of wearables in its Galaxy Gear line.
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