Samsung Profits Drop as Apple Wins Over High-End Smartphone Buyers

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The holiday season is over, and the first reports are in: Apple has apparently won the heart of the holiday shoppers with its iPhone as Samsung has just posted its first profit drop in nine quarters, falling short of analyst forecasts (via BusinessWeek).

Operating profit was 8.3 trillion won ($7.8 billion) in the three months ended December, the Suwon, South Korea-based company said in a statement today. That compares with profit of 9 trillion won a year earlier, according to data compiled by Bloomberg.

Samsung shipped 13 million units of its flagship Galaxy S4 during the fourth quarter and sold 17 million in the previous quarter. By comparison, Apple sold 31.2 million iPhones in the third quarter of 2013 and 9 million iPhone 5s and 5c devices during the first weekend of availability.

It is worth noting here that Samsung shipped 91 million smartphones in the fourth quarter, posting a 4% growth compared to the previous quarter, but it is good to know that the price range of its handsets varies from $150 to $900.

And the company will likely be looking at another weak Q1, as it has no real driver for the January-to-March period. Furthermore, it will face more competition in the Chinese smartphone market starting this year, thanks to the Apple-China Mobile deal.

As the Samsung statement highlighted, there were multiple factors contributing to Samsung’s profit drop: the slowing of high-end smartphone sales and the drop in global TV demand, among others. Profits at Samsung’s chip division, however, have nearly doubled to 2.6 trillion won.

Every sign points to a record holiday quarter for Apple. We will find out on January 27, when the company will officially announce its holiday quarter earnings.