Tuesday, 12 August 2014

Profit Margin Continues to Decline Post-Release Samsung Galaxy Note 2

The year 2012 seems to be the best year of Samsung; after successfully making the Galaxy S3 as the best-selling smartphone in the world, a new report from the analysts also indicated that it was the last year where Samsung was able to print with the highest profit margin.

As you have read in various articles technology lately; besides having to compete hard against their old enemies, namely Apple, Samsung is now also busy fighting the new vendors from China and India continue to enjoy increasing popularity in their respective countries. No kidding, stock inventory of unsold phones directly accumulate and make Samsung suffers a decrease in the level of net profit up 20 percent in the last quarter.

Now analysts warned investors that the income level of Samsung's mobile phone business is likely to continue to decline in the near future. From their data, the analysts noted that the highest level of profit margin achieved when they released the Samsung Galaxy Note at the end of 2012.

Mark Newman of Bernstein Research said that the earnings peak was evident in the first quarter of 2013 in which the print division of Samsung smartphones reached 25 percent profit margin. However, 1.5 years after the achievement, its margins fell to 19 percent at present, and predicted to continue to decline to 15 percent by next year.

Analysts argue that the possibility to see flexible displays based products capable of generating Samsung looks very thin. But with the support of a very wide sales network, the Samsung still has a chance to turn things around, that is by pursuing a strategy to offset the price war invasion of Chinese products cheap smartphone.

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