Slowing Smartphone Sales Suggest Mobile Won’t Be Samsung’s Priority In 2016
Tough year ahead for Samsung as smartphone sales slow during 2015, but other areas such as M2M and OLED displays offer hope
Samsung could be set for a major shift in its business focus this year after its latest financial results showed that the company’s suffered a large drop in profits in 2015.
The company saw its net profit slid almost 40 percent year-on-year to 3.22 trillion won (£1.8bn) as demand for smartphones fell across the world, especially among the increasingly crowded Android market.
This was in spite of the company’s mobile division actually recording slim profits for the second consecutive quarter following a period of some turmoil for the South Korean manufacturer, which will be hoping that its speculated Galaxy S7 smartphones will help initiate a turnaround.
All change?
Overall, Samsung’s saw operating profit of 6.14 trillion won (£3.55bn) on sales of 53.3 trillion won (£30.8bn) in its fourth quarter, both year-on-year improvements that were in line with the company’s guidance, but it warned that it may be difficult to continue this level during 2016.
The company will be hoping that new flagship smartphones, overseen by new head of smartphones DJ Koh, along with the continued expansion of its Galaxy A series will help drive strong smartphone sales, but Samsung is finding itself increasingly hamstrung by lower-priced competitors such as Huawei and Xiaomi.
This may mean that Samsung now looks to other areas of its business to grow profits, as today’s results revealed interesting returns elsewhere.
This includes the company’s OLED display business, marked out for its potential medium-to-long growth potential thanks to the increasing development of new applications from the technology, such as transparent, mirror, head-mounted and automotive displays.
Samsung has also made a significant play for the M2M and smart home markets over recent months, with the purchase of IoT company SmartThings announcing the company’s entry into the connected home market. The company says it now “plans to lead the Smart Home era with diverse IoT-enabled products”.
This may also link to Samsung’s large flat-screen televisions, also identified as a key growth sector as it looks to captialise on the appeal for new devices around the Olympics this summer.
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