Samsung’s CFO, Lee Sang Hoon, fears the company’s second quarter earnings will fall short of expectations. Samsung is expected to post profit earnings of about $8.4 billion for second quarter of 2014, compared to $10.2 billion record profit that was posted in the third quarter of 2013. Reports say that a drop in the sales of their smartphones is the major course of the lower profit. Samsung’s smartphone sales dropped from 87.5 million to 78 million.
According to the Enquirer, this drop may be due to a decline in demand for the Galaxy S5 due to strong competition from other flagship Android smartphones, such as the Xperia Z2, HTC One M8 and LG G3, as well as iPhone sales. In low budget smartphone segment, there is also competition from Chinese manufacturers and other emerging markets smartphone manufacturers.
According to Yonhap news agency, an analyst at KTB Investments & Securities stated saying:
“The main reason behind the lowered earnings estimate largely stemmed from weak smartphone sales. Strengthening competitiveness of local players in emerging markets are hurting sales of Samsung’s lower-end smartphones.”
The Korean company is planning on focusing their attention more on their memory chips and modern television sets in other to increase profit.