Samsung has revealed that its profits in the second quarter of 2014 dropped by a massive 20% compared to the same period last year, with a 15% reduction against the first three months of 2014.
The company had said at the start of July that it was bracing itself for a 25% decline. Today’s new numbers show that net profit was 6.25 trillion won (£3.6 billion), a slide of 19.6%. Operating profit dropped by an alarming 24.6%.
Samsung has blamed the drop on traditionally slower sales of smartphones and tablets in the second quarter of the year, plus the strength of the won, which is hitting Korean exports. However, rival LG last week revealed a surge in profits of 165%, showing growth is possible.
In a statement, Samsung said that ‘prospects for growth were unclear’ and that, ‘sales of mobile devices [will] increase with the rollout of flagship products and new models, but profitability may suffer due to a heated race over price and product specifications.’
That appears to be an admission that Apple is about to eat further into its profits with the launch of the iPhone 6, due in September.
The news comes a day after new IDC figures showed Samsung’s global smartphone market share slid by 7% in the second quarter of 2014.