Buoyed by two brand new large iPhones, Apple managed to beat Samsung in Q4 2014 to become the world’s top smartphone vendor as it sold 74.83 million iPhones compared to the latter’s 73.03 million. However, the tide seems to have changed in the first quarter of the year (Apple classifies it as the second as per its calendar) as Apple’s iPhone sales stood at 61.2 million while Samsung’s soared to 83.2 million making it the top smartphone vendor.
However all is not rosy as Samsung’s net profit in Q1 2015 declined by 39% when compared to a similar period last year. Samsung had a net profit of 4.63 trillion won in Q1 2015. It had 7.49 trillion won in Q1 2014. As far as the mobile division of Samsung Electronics goes, it managed to net an operating profit of $2.5 billion on revenues of $24.1 billion. While profits for the entire company may have dropped, smartphone sales rose. Samsung attributes the rise to high demand for its new Galaxy A line of smartphones that includes the Galaxy A3, A5, A7 etc that have been introduced in markets like India at competitive prices.
The company expects better results come Q2 as it is the period that its flagship Galaxy S6 and S6 Edge which have been well received by analysts and customers alike have gone on sale globally.
The company will however have to go the extra mile to win over customers in key markets like China where it is up against Apple’s iPhone that enjoyed a 71% increase in sales and other players like Xiaomi which looks unstoppable at the moment and Huawei which has made extensive inroads in markets not just in its hometurf (Asia) but Africa as well and is looking to wooing the western markets. In India, Samsung’s long dominance has been threatened recently by the likes of Micromax and other homegrown players. The introduction of the Samsung Z1 helped it gain some ground among the budget conscious and the company is expected to follow up the device with the Z2 soon. Other players like OnePlus and OPPO have also set up shop in India and introducing cheaper smartphones further increasing competition.
Source: Samsung, Strategy Analytics