Samsung announced its earnings for the fiscal second quarter of the year. Revenue was up 9% to 57.46 trillion won quarter over previous quarter. Operating income also rose 9% to 5.93 trillion won on the same basis. However, the division that includes its smartphone operations did poorly. Operating earnings dropped 3% quarter over previous quarter to 6.26 trillion won.
The really depressing news was in the forecast for that division:
Expect smartphone and tablet markets growth to continue under strong seasonality, while competition to intensify led by new product launches
- Smartphone : Expect balanced growth in DM and EM
∙ Developed markets : LTE replacement demand to continue, and expect competition for year-end promotions
∙ Emerging markets : Expect ramp up growth led by mass-market smartphone, including China
- Tablet : Expect high growth in both DM and EM
∙ Expect competition to intensify as new product offerings to expand
In other words, competition finally has caught up to Samsung, as it did to Apple Inc. (AAPL). This is more proof in the market that the sales cycle for smartphones has slowed. With it, Samsung's growth opportunities have tapered off, as have Apple's, based on its most recent earnings announcement.
Being the market share leader in a market that no longer has magnetic attraction makes a company lose its luster quickly. That is what has happened to Samsung.
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