My Thoughts on Technology and Jamaica: Samsung’s declares 60% Profit and 20% Sales decline - Tizen OS Response needed as India’s Diwali may Light a Path in November towards Future Prosperity

Wednesday, October 8, 2014

Samsung’s declares 60% Profit and 20% Sales decline - Tizen OS Response needed as India’s Diwali may Light a Path in November towards Future Prosperity

Samsung may be selling more smartphones than Apple but they’re losing the smartphone battle overall to HTC, Huawei and Lenovo!

The Stats for the Third Quarter of 2014 aren't out as yet. But already one of the piggies in the pen has squealed, signaling that they're having problems: Samsung. For the first time, Samsung has experienced a decline in profits as stated in the article “Samsung stumbles amidst Pressure from Apple, iPhone 6”, published OCTOBER 7, 2014 10:02AM EST by STEPHANIE MLOT, PC Magazine.

Samsung made this announcement on Tuesday October 7th 2014, well before their full Third Quarter 2014 Report, which ended on Tuesday September 30th 2014 as noted in the article “Samsung expects 60 percent drop in profit for Q3 2014”, published October 6, 2014 5:05 PM PDT by Steven Musil, CNET News.

The figures for the Third Quarter of 2014 aren't so good to behold, dear reader:

1.      59.7% drop in profits from US$ 9.5 billion (10.2 trillion Korean won) to US$3.8 billion (4.1 trillion won)
2.      20% drop in sales earnings from to US$$43.7 billion (47 trillion won)

These numbers were widely expected after both Samsung and Apple took a fall in their shipments and marketshare to the rising tide of cheaper smartphone options from HTC, Lenovo and Huawei as concluded in my blog article entitled “IDC Stats for Second Quarter of 2014 points to Asian Smartphone Rise – How cheaper smartphones are slowly killing BOTH Apple and Samsung marketshare

Samsung’s Profit and Sales decline - Cheaper competition needs a Tizen OS Response

The reason for the decline runs a lot deeper than just cheaper smartphone competition.

They knew it was coming, especially in face of the continued success of the Apple iPhone 5S and 5C and now the Apple iPhone 6 and Apple iPhone 6 Plus as stated in my blog article entitled “Apple iPhone 6 and iPhone 6 Plus - No Sapphire Screen but 128GB Storage and NFC-powered Apple Pay in Apple's Biggest iPhone Launch”.

Which might explain why they'd outed the Samsung Galaxy Alpha which clearly has Apple stylings, a sign that they'd run out of creative juice as noted in my blog article entitled “Samsung Galaxy Alpha with Metallic Band - Last of the 5” smartphones with decreased Battery Life as the Luddite Camp gets Larger”.

It also relates to Samsung's overestimating the market and a lack of full control over the smartphone experience as Apple currently enjoys making both the iOS Operating System and the Hardware. This as they still don't own the Operating System that runs their smartphone, relying on Google Android, which they use license free. Apple profits both from handset sales as well as from App purchases from their Apple iTunes Store as well as from mobile advertising.

Interestingly, Apple also makes more profit from mobile Advertising than Google despite Android having a numerical advantage as noted in my blog article entitled “Google Android Top Dog in Mobile Ad Marketshare in First Quarter of 2014 – Apple iOS STILL more efficient at Mobile Advertising powered by iTunes”. 

However, Google makes all the profits from the sale of Apps via their Google Play Store, making initiatives like Tizen OS all the more important as noted in my blog article entitled “MWC 2013 reveals Firefox OS & Tizen OS launching Second & Third Quarter 2013 respectively - Samsung's Despicable Me 2 & Mozilla practices The ABC's of Death”.

Tizen stumbles in Russia – India’s Diwali may Light a Path in November towards Future Prosperity

To date Tizen OS hasn't been much of a success but it’s clearly key to their future prosperity in the smartphone business as noted in “Ouch: Samsung warns of 60% profit drop as sales slow”, published 7th November 2014 by Kevin C. Tofel, GigaOM.

The Samsung Z9000 ZEQ, which has stylings borrowed from the Samsung Galaxy line of smartphones but running Tizen OS, failed to break into the Russian market in August 2014 as noted in my Geezam blog article entitled “Samsung Z running Tizen OS fails to enter Russian Market hints at Caribbean and Latin American Launch”.

Samsung may have better luck launching the Tizen OS based Samsung Z9000 ZEQ smartphone in India on or around India's Diwali festivities in November 2014 as stated in the article “Samsung to launch Tizen smartphone in India by November”, published 19 September, 2014, GSM Arena and “Samsung to Launch First Tizen Smartphone in India by November: Report” published September 19, 2014 by NDTV Correspondent, NDTV Gadgets.

This is an excellent move, as the Indian market is growing, making even Blackberry sellout their Blackberry Z3 smartphone as I'd reported in my blog article entitled “Blackberry blogs positive reviews of Passport as Z3 sells out in India - Blackberry Passport may be their ticket on the Indian Express”.

At least the Samsung Galaxy Gear 2 and Samsung Galaxy Gear Neo 2 smartwatch launched since Saturday February 22nd 2014 are reppin’ for Tizen OS as reported in my Geezam blog article entitled “Don’t cry over spilt Samsung Milk as Samsung Galaxy S5 and smartwatches disappoint”.

The continued use of the Tizen OS in smartwatches suggesting that Samsung will have still longer ways to go before Tizen becomes an OS Telecom Providers or even Telecom equipment makers will take a chance.

This conclusion is based on Huawei's recent snub of Tizen OS in August 2014 as stated in the article “Huawei gives Samsung's Tizen OS a thumbs-down”, published August 25, 2014 9:16 AM PDT by Don Reisinger, CNET News.

Still India will give the Samsung Z9000 ZEQ smartphone a push start towards an upturn that may boost them to achieving the dream of having their own smartphone cake and eating it!

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