Samsung Reports 60% Drop in Profit

Ahead of its official financial disclosure for third-quarter earnings, Samsung has announced profits are likely to drop by 60 percent compared to last year. The South Korean-based firm placed the blame largely on "intensified smartphone competition."

That competition includes Apple on the high end, and a growing number of Chinese rivals such as Huawei and Xiaomi on the low end.

Apple last month released its new iPhone 6 and iPhone 6 Plus, quickly breaking records with first-weekend sales alone of more than 10 million. Meanwhile, the emergence of numerous, lower-cost but feature-rich smartphones from China has forced Samsung to lower prices on its own handsets to compete in that segment of the Android market.

New Lineups Planned

Those lower prices have hit Samsung's bottom line even as it reported marginal increases in smartphone shipments during the third quarter. Overall, Samsung shipped proportionally fewer high-end phones, while being forced to drop prices for its better-selling, but older smartphone models.

Looking ahead to the fourth quarter, Samsung said it "cautiously" expects to ship more new smartphone models in the coming months. It also projects a "strong seasonal demand" for its TV products as the holiday shopping season approaches.

Samsung said it is getting ready to develop new lines of smartphones with new materials and innovative designs in an effort to "secure sustainable mid- to long-term growth despite intensified competition." It also plans to release a series of new mid- to low-end smartphones that better compete on both features and price, the company added.

Looking for a Holiday Boost

Samsung's new Galaxy Note 4 will go on sale this month, while the Galaxy Note Edge, a smartphone with a curved-edge display, is set for release later in the year. With screen sizes comparable to Apple's new iPhone 6 and iPhone6 Plus, it remains to be seen how...

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