News by Luke Jones on Tuesday July 08, 2014.
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When Samsung revealed lately that it would make a loss during the last quarter, we pegged it to lessening demand in key emerging markets and competition at budget and flagship level. The company has today confirmed that is the case and has admitted that it has needed to spend more money on advertising. However, Samsung has also said that the biggest cause of the loss is the changing currency patterns around the world, especially against the Korean Won.The company will now see revenue fall by 24% over the quarter, while sales are expected to be down between 9-11% compared to this time last year. Samsung says it has stocked inventory in warehouses that it cannot shift due to "weak demand," with Europe causing the company the biggest problem. Increased competition in all areas of the market has accounted for the losses, with both the budget and high end price points effected. In flagship territory the Galaxy S5 is still the biggest selling non-Apple smartphone, but it has lost ground in the market to a slew of rivals. The LG G3, Sony Xperia Z2, HTC One M8, Moto X, and Nokia 928 are just some of the handsets that match the GS5 and sometimes are better than it. With this much choice the flagship market is more competitive than it has ever been. Lower down the scale, Samsung has been hit even harder by devices arriving that are simply better or offer better value for money. The Moto G and other affordable handsets make Samsung's under performing and more expensive budget devices seem outdated. China has been seen as a big frontier for Samsung, but the company has struggled with its mid-range devices in the country as many consumers await more affordable 4G offerings. The company's tablet business is struggling with increased competition too, even though Samsung has recently launched the Galaxy S Tab line to acclaim. The biggest reason for the loss though is the increasing value of the Korean won against the dollar, although Samsung is "cautiously" hoping that sales will increase later in the year when the Galaxy F, Galaxy Note 4, and other smartphones arrive. source: NewsWire