Samsung Electronics' third-quarter profit plunged thanks in large part to a steep decline in its mobile unit's profit and sales, as rising competition from Chinese rivals like Huawei, Lenovo and Xiaomi has started to take a toll. Samsung said its mobile performance in the current fourth quarter remains uncertain, but the company hopes to bounce back thanks new phones with flexible displays in 2015 as well as more competitive phones at different price points.
LG Electronics posted its best results from its mobile unit in five years as sales and operating profit jumped thanks to record-high smartphone sales in the third quarter, driven largely by the G3, the company's latest flagship device.
Postpaid competition has been dominating mainstream and industry press headlines. Postpaid device and double data promotional moves by all rivals set the competitive tone as we enter the all-important fourth quarter. On Verizon's third-quarter 2014 earnings call, CFO Fran Shammo noted that the prepaid sector growth has slowed relative to previous years, and given entry price points are so close to postpaid, some of those subscribers are moving to postpaid.
Research firms Gartner and CCS Insight think much of the mobile phone shipment growth that will occur in 2014 will be driven by low-cost smartphones, underlining a shift down market that vendors and platform companies have been keen to take advantage of in their search for growth.
Samsung Electronics forecasted that its operating profit in the third quarter fell by as much as 60 percent year-over-year amid stagnating smartphone sales. However, the company is hopeful that sales will pick up in the fourth quarter and said it is readying new phones in the low-to-midrange market to help it recover ground.
The smartphone revolution has greatly expanded the size of the handset market with global revenues doubling in the last six years, as consumers substitute more expensive smartphones for their feature phones and basic phones. Yet changes have devastated most of the leading incumbent handset vendors.
Samsung Electronics saw sales and operating profit at its key mobile unit fall in the second quarter as the company faces intensifying competition from low-cost Chinese rivals and growing worries from investors of its ability to maintain its position as the No.1 handset and smartphone maker.
Huawei said its smartphone shipments jumped 62 percent year-over-year in the first half of 2014 and that it is on pace to reach its goal of shipping 80 million smartphones for the full year.
The House on Friday passed legislation that makes it legal for consumers to unlock their cell phone and take it to another carrier, and President Obama indicated he will sign the bill into law.
LG Electronics reported a return to growth in its mobile unit in the second quarter after a string of financial losses. The company posted a new record in terms of smartphone shipments for the period thanks in large part to the launch of its latest flagship device, the G3.