Samsung Electronics Co said yesterday its annual profit fell for the first time in three years as its smartphone growth lost steam.
The company’s operating profit for last year is expected to be about 24.9 trillion won (US$22.7 billion), down 32 percent from 2013, based on preliminary figures. It will release its full financial results, including net profit and a breakdown of business divisions, later this month.
For the fourth quarter of last year, Samsung said operating profit was about 5.2 trillion won, down 37 percent from a year earlier. The result was still higher than analyst expectations of 4.9 trillion won according to FactSet, a financial data provider, due to robust demand for memory chips.
Analysts said that Samsung’s smartphone business, which contributed two-thirds of its profit in the past two years, continued to struggle, but improvements in its semiconductor division helped the company rebound from the third quarter, its worst quarter in nearly three years.
“It’s time to see Samsung as a semiconductor company,” Woori Investment & Securities analyst Lee Sei-cheol said.
Quarterly sales dropped 12 percent to 52 trillion won, in line with the expectations of analysts.
Samsung’s semiconductor division, which develops memory chips, mobile processors and solid state drives, will generate more profit than Samsung’s Galaxy phone sales this year, according to Lee and other analysts.
Samsung’s Galaxy smartphones were all the rage in 2012 and 2013, pushing the South Korean phone maker past Nokia, Motorola and Apple Inc in sales volume.
However, that growth stopped last year partly because of missteps in Samsung’s flagship models and it had to heavily discount older phone models to keep them selling.
The company was also squeezed in the low and mid-end phone segments by Chinese smartphone makers such as Xiaomi Corp (小米) which surpassed Samsung in China and India.
Analysts said Samsung’s smartphone business is unlikely to repeat the growth momentum it had in the past. Growth instead will come from demand for memory chips, but that gain will not be enough to stop Samsung’s earnings from dropping again this year, they said.
To develop new revenue sources other than smartphones and semiconductors, Samsung is pushing hard in the emerging industry known as the Internet of Things, with Internet-connected televisions, smart homes and smart cars.
BK Yoon, Samsung president of consumer electronics, said earlier this week that by 2017 all Samsung televisions will be Internet connected. He also said that in five years all Samsung hardware products will be ready for the Internet of Things.
The company is taking its software, which is designed to challenge Google’s Android operating system, to television sets. Samsung said that its all-new Internet-connected televisions this year will run on Tizen, its own operating system.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six