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The situation for Samsung is a tad grim, as the South Korea-based company reported a 74 percent year-over-year decline in net profit during Q3. This marks Samsung’s fourth consecutive quarterly decline, and marks its lowest profit margin since the second quarter of 2011.

Profits during the quarter sat at $3.9 billion, right on par with Samsung’s previous guidance. Revenues fell 20 percent to $45 billion when compared to the same quarter last year. As for Samsung’s mobile business, which ships more handsets than Apple, it saw a 60 percent year-over-year decline and only one third of the net profit Apple saw during the same quarter.

Samsung says the drop in profits came from price cuts of older phones and “declined shipments” of high-end models. Going forward, the company thinks “new smartphone lineups featuring new materials and innovative designs, as well as a series of new mid- to low-end smartphones with strong competitive positioning on both hardware specifications and price,” will help get its business back to where it once was.

“High-end smartphone sales result was somewhat weak,” said Kim Hyun-joon, senior vice president at Samsung’s mobile communications business. “We will fundamentally reform our product portfolio.”

  • Proaxel

    Inb4 even more Samsung taunts. =P

  • Virus

    Only reason people wanted the galaxy phones before was because of the bigger screen now every phone you buy the normal screen size is about 4.5 inch

    • Basically. They spent everything marketing big phones, but spent nothing on good in-house developers. Now it’s evident, even to non-techy folks, that their stuff is fairly sub-par. People were fooled, once, or maybe even twice, but they see through Samsung’s deck of cards now.

      • anonymous

        i dont think thats the main reason, samsung flagships has been top of the line in hardware from the get go, and every yr its the highlight amongst the android devices. Some of the reasons its losing market i can think of are–

        there are very cheap android flagship phones now which can be bought at 300$ off contract like One plus or can be shipped,

        other companies like lg, htc, sony are gaining some momentum as consumers are opting for other brands within the android ecosystem.

        Windows phone is growing at the expense of both ios and android in some regions.

        , huawei is a major player in the international market bringing very cheap quadcore processor phones with 5″ screen and sd slot less than 150$.

        local brands like micromax, karbonn, xiomi, meizu,Qmobile etc are causing problems for samsung in local markets.

        previous users who loved ios but didn’t change due to the small screen are having a go this time adopting iphone 6 and 6 plus.
        and other reasons which i cant think of at the moment.

        ppl who uses iphone or android phones have their own preference and most of the apps are present in both the platform, so its really a matter of choice rather than superiority over the other

      • theappleogist

        Top of the line in hardware? Uhm, if I wanted a Pretend iPhone, I’d get HTC. Now that’s great hardware but effed-up OS unfortunately.

      • anonymous

        ok so on an average in the last 4 years, samsung has been in the forefront of hardware, first with s series, and then with note.
        and then abt htc, lg and sony i already mentioned how its taking a share in the market, and do u realize that some ppl actually likes android more than ios not coz of apps but just in terms of pure OS, and thinks ios is pretty limited, coz if u do then android is effed up according to u, on the other hand i agree with u that ios is pretty fluid but i dont like to impose my will on others who like android more than i like ios. ios has less fragmentation runs on limited devices and hardware is pretty standard across board, as opposed to an an ecosystem which supports much much more screen resolutions with dozens of hardware architecture, i think its an unfair comparison.

    • hkgsulphate

      thats actually true
      my fds (especially those who use galaxy phones) want to switch back to iOS LOL

  • Tommy Gumbs

    This was the risk Samsung took when they flooded the market with cheap phones. The Samsung management team knew this scenario could be a possible scenario. However, they knew they needed to break the down the walls in the smart phone arena. Unfortunately there plan didn’t work in the end and the results are now showing on the balance sheets. Apple in this case has won simply because they did not let Samsung fool them into following them, and there profit margin has stayed positive. Happy stockholders! With that said, it could of gone either way and Samsungs plans could of worked. This is not news worthy at all but definitely interesting from a business perspective.

    This will inevitably force samsung to change the current line up. But there financial woes in the smart phone arena stems from giving there stuff away cheap, to get market share. Market share means nothing if you can’t keep your profit margin. Cash is king at the end of the day, and Apple has learned this the hard way in the past.

  • Zac Bishop

    Screw Samsung -android
    Screw Samsung -apple

    In the end we are all on the same side 🙂

    • Alberto Espinal

      The side of Apple, right?

      • Jeffrey

        He means Google and Apple both hate Samsung but I doubt that since Google and Samsung worked together to make fun of Apple a while ago.

      • Not Google he means fans of Android / Google hate Samsung and fans of iOS / Apple hate Samsung…

      • Jeffrey

        Ah then yes he’s right.

      • Zac Bishop

        Both 🙂

  • n0ahcruz3

    LG benefited from Samsung’s losses

    • Zac Bishop

      Probably all android OEM’s benefited form there losses

  • Mike

    Well they spent so much money on ads that kept bashing apple so..

    • Seba

      Exactly my point 😉 Samsung suck!!!

      • Ali

        You didn’t make a point prior to his comment (at least not in this topic).

      • hkgsulphate

        samsung sucks <— always true anyways

  • Slifur

    For sure MrElectrifyer wont comment now. He’s heart will break if he read this and find another link to prove this aint true. Haha

    • What’s this asinine numbkull trying to prove?

      • n0ahcruz3

        Lol maybe because we criticize apple so much.

      • I’m betting that’s the reason…some people just can’t see Apple doing anything wrong.

      • Slifur

        Just admit it. You’re a samsung fanboy lurking around an apple blogsite. That’s it hahaha

  • JulianZH

    Rather then making 10 cheap similar phone models. They should just focus one or two models.

    • Jeffrey

      Well no, they do have a few models which are top priority; the Galaxy S and the Galaxy Note, and optionally, the Galaxy Alpha but they also sell cheaper phones so they can expand their target group. So it’s actually smarter to have both a few top of the line models and a few lower end models.

  • Poor Samsung, they really need to cut on the marketing, most of the non-flagship phones, and focus on maybe 5 categories of phones.

    • n0ahcruz3

      They spend too much on marketing and spam the galaxy line up. They definitely need to rethink their strategy and also step up with their design.

      • True. All that marketing could have been used to build more Sasmsung Mobile local retail locations instead of making dozens of ads demoing the same thing…they’re slowly learning that many want metal (regardless of it’s downsides) on their SmartPhone, and no bloatware in their software.

      • n0ahcruz3

        Yes unfortunately alot of people perceive that. For example the S5, the phone is a beast but media and people shunned it because of the design and its made of plastic even though specs and the cost to manufacture it is as high as the i6 if not higher.

      • True that. It cost over 25% more (http://bit ly/1wN2mEB) in parts over the iPhone 6 (http://bit ly/1wN2qnU). Yet people still think it’s cheap ’cause of the exterior plastic.

        I think they could appeal to a lot more Android users if they just fix touchwiz. They’re slowly breaking all it’s non-stock Android features/settings into separate APK packages and making them readily available in their Samsung App Store for those who desire them. I think that’s how it should have been from the start.

    • Rowan09

      Samsung will focus on those lines while making 20 different models. They confuse their own customers with too many options of the same device. For example the Alpha was just released and they have the Note 4 and Note Edge released a couple weeks later.

      • Yeah, they’re fast at releasing new devices with minor changes. That backfires as fast degrading of device value and makes choosing kinda hard…so, some people just don’t bother.

  • Alberto Espinal

    Well it’s like they tried to race that Toyota Corolla against the Bugatti Veyron

    • Jeffrey

      What a great on-topic comparison!

      • Alberto Espinal

        Right!!

  • Jeffrey

    The picture on top of the article reminds me of when I read that all Samsung employees have to bow for the CEO. What a great story that was.

  • Tommy

    IMO the problem with samsung is nothing special stays. Samsung only lets you feel special for a month or two before they unleash all the crap.

    First the Galaxy tag (back in the S1 S2 days) was reserved for their high end shit. Now the entire line up from shit standard all the way to the S5 has Galaxy.

    Then the Alpha came out (one that was supposed to compete with the iPhone). And rumors is they now wanna make low end devices with the Alpha name to compete with XIaomi.

    Worse still, their pricing strategies aren’t exactly cheap with middle end shit going for premium prices (compared to the chinese phones).

    Stupid company. Shold have just stuck with one device per tag instead of throwing everything and seeing what sticks.

  • Any company who’s strategy is to throw shit at the wall and see what sticks has no cohesive business strategy.

  • Yujin

    Sell it off and return money to investors…….lol

  • dialogueanalog

    I believe there are a few things that went wrong for Samsung.
    Range of products – too many products is akin to Rome trying to grab as much territory and ending up losing because of lack of control. Samsung wants to occupy each and every segment, cheap, mildly cheap, medium, medium to high, high, ultra high. Now the one thing that Steve J is credited for is coming into Apple and slashing products that were not necessary. He then made sure the company excelled at a few things rather than did ok in many things. Always a great strategy. Niche products can be mass market.
    Pricing – follows from the range of products, you have so many pricing points and fairly low visibility as to the benefits that people just stop buying. Choice is bad. Controversial but the theory of choice is one that says yes choice is good as long as it works but at some point comes a tipping point and it becomes too much for the consumer. Slash the cheaper smart phones because – they don’t work properly, and planned obsolescence is just a sure way to piss off your consumer. Choose a market and stick to it.
    Marketing – it is evident, through many many studies that smear campaigns are only effective for so long. At some point, even your supporters will start thinking that it has gone way too far. The most positive campaigns that educate the consumer as to the benefit of YOUR product are most effective.
    Quality – the main aspect of a product that you consider spending hundreds of your hard earned currency for is quality. is it worth the money to buy this product considering it is pretty much the same price as other products on the market. Samsung has not learnt that no matter how much power you put under the hood, if you feed it diesel instead of petrol, it will go wrong. This is what touchwhiz is. In a petrol car they put diesel. It slows down the performance of the phone. they spend x amount of dollars making it the best performing phone but yet they fill it with rubbish. Optimize instead of cramming everything and anything under the sun. how often is the hand gesture used on a phone. given that 90% of the time it is on the desk or in your pocket, do you need to have such a feature? Its all about catering to the consumer and not yourself as a firm. Iphone has camera and usability, sony has outstanding camera, motorla has the price and features, Samsung has a long list of features which sound great but when it comes to usability…
    they need to get back to the drawing board and consider who can they actually compete with rather than fighting everyone under the sun. they can produce good phones but they need to decide what to concentrate on before heads start rolling.

  • Matt

    60%?!?!
    Like that a LOT!
    Like a LOT a LOT!
    Either way it’s great news. Hate those smug faced dicks and their ways of doing things -.-

  • Nex

    It’s no surprise, really.

    Samsung’s old highend flagships like Note 3 and S4 are still beasts, and the successors are barely upgrades over it.

    While the rest of their lineup are absolutely massacred by Xiaomi and Moto Gs when taking price, specs and software support into consideration. Releasing a unappealing new model every other day doesn’t help them either.