For the past few years, Apple has seethed as it watched Samsung Electronics grab the buzz and market share lead with its Galaxy phones. It wasn’t just losing that bothered Apple. It was getting spanked by a company Apple felt had essentially copied its best smartphone and tablet innovations. Apple launched a global patent litigation war against Samsung that produced a few victories along the way, but failed to fundamentally change the competitive dynamic. Now, it turns out, Samsung appears to be in free fall. And it’s collapsing all on its own, without needing any help from Apple’s legal eagles.
Samsung Electronics estimated its third-quarter operating profit more than halved from a year earlier, hit by weak smartphone sales, forcing the company to rely more on its chip business to drive future earnings growth. As stiff competition from Chinese vendors continues to pressure its mobile division profit—it derives more than 60% of its profit from the sale of mobile phones—investors have sold off Samsung shares on concerns about its outlook. Its stock is down about 15% so far this year. The world’s largest smartphone maker by shipments said Tuesday its third-quarter operating profit likely fell 57.8% to 61.8% from a year earlier to between 3.9 trillion won ($3.6 billion) and 4.3 trillion won ($4.0 billion). Last year, Samsung reported an operating profit of 10.2 trillion won. A poll of seven analysts expected Samsung’s operating profit to come in at 4.3 trillion won.
