Samsung has indicated that their upcoming earnings report will not be greeted enthusiastically by investors. The Korean tech giant yesterday said that its operating profit during the most recent quarter likely dropped by about 57-60% compared to the same quarter a year-ago. That's a huge drop off for any handset manufacturer, and particularly jarring for Samsung given its historic position as a top seller of Android devices.
Samsung attributed the drop in profits to the growing popularity of lower-end devices along with increased marketing expenses.
Samsung's smartphone business is facing intense competitive pressure at the low-end from Chinese handset makers, and at the high-end from the iPhone. With the iPhone 6, Apple essentially wiped out Samsung's distinguishing feature: a big screen size. And with the jumbo iPhone 6 Plus, Apple has now entered into the "phablet" segment that Samsung pioneered.
For years, one of the key advantages Samsung and other Android manufacturers were able to hold over the iPhone were bigger screens. While many of these larger-screened Android devices had less than stellar battery life and -- in certain cases -- additional shortcomings, consumers still purchased them en masse. With the iPhone 6 and 6 Plus models now on the scene, the picture may get even bleaker for Samsung in the months ahead.
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