Samsung just posted its first-ever decline in smartphone shipments, and it’s posing big problems for its overall business.
According to the company’s earnings statement, Samsung smartphone shipments declined slightly in the fourth quarter of 2013. Although Samsung did not specify how many fewer smartphones it shipped, BI Intelligence estimates 80 million total unit shipments in the last quarter of 2013, 2 million fewer than in the third quarter, or a 3% decline. That still represents 26% growth over fourth quarter 2012, but compare that to the third quarter of 2013, when Samsung shipments grew 44% year-over-year.
Reports are circulating that Samsung will release two versions of its next flagship phone, a high-end and low-end version. Samsung’s recent smartphone sales performance goes a long way to explaining why the pressure is on to come out with a phone that can get consumers excited again and keep Samsung smartphones sales from falling further.
As BI Intelligence detailed in our recent smartphone market update report, the low-end of the smartphone market is what will drive the biggest global growth in smartphone sales, particularly in emerging markets. So it makes sense that with Samsung looking to kickstart smartphones sales once again, they would keep the low-end of the market firmly in mind.
Despite the decline, though, it’s important to keep in mind: Samsung is still the largest smartphone manufacturer in the world. In the third quarter, it had a global shipments’ market share of around 32%. And, in brighter news, Samsung also reported that tablet shipments were “up sharply” in the fourth quarter. So Samsung is far from down and out. But smartphone sales are a huge business, especially for Samsung.
Samsung’s withering smartphone success has affected its overall business. The company posted its first decline in quarterly profit in two years.