Following the footsteps of Nokia and Motorola, the world's No. 3 handset player, Samsung, was also hit by the dramatic drop in handset prices as its Q4 profit fell 8 percent. It's clear a trend is emerging: the lack of upside in end market demand is leading to increased price competition. Further aggravating the situation is the trend toward lower-priced handsets in emerging markets.
Samsung has tried to stay out of the cheap phone game, resisting the temptation to offer phones under $50 in places like India and China. But the fourth quarter was tough and sales of its handsets shifted toward lower-priced models. We'll have to see if Sony Ericsson, which has steadfastly worked to stay out of the cheap handset market, had any pressure in the fourth quarter.
For more on this:
- here's an article from Globe and Mail