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Trouble Brewing For Samsung: Profits Plunge 60%

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Samsung’s operating profits are falling by 60% and the brand is facing severe Is Samsung in some sort of trouble?competition from low end manufacturers like Xiaomi and Huawei. Innovation is the key to success and Samsung needs to work on this aspect to rise to the pinnacle.

Samsung seems to be heading to some serious trouble. Last week Samsung announced that its operating profits had fallen by 60% as compared to previous year. The revenue too has fallen by 20% in this period. Despite all this commotion, the profits are still in billions and share prices too have risen marginally.

However, as the market is getting saturated, Samsung is being attacked by critics on all fronts. An official press release by Samsung confirms this notion as it admits to the fact that it’s operating margins had declined due to increase in marketing expenditure.

Samsung is losing its market share despite selling phones for comparative fewer prices. Cell phone manufacturers as Xiaomi and Huawei are giving a stiff competition to Samsung in the low price category. Samsung is also facing fierce competition in the Android market from Motorola, LG, HTC and Sony among others.

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In this current embargo, Samsung is only left with two options. It has either to compete on the price front or has to get innovative. Samsung is worth over 150 trillion dollars and smartphone are just one of the numerous products, the brand offers. However, innovation is the key to success and Samsung has to pull up its socks on this front, if it is to succeed in the long run.



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