Samsung earnings fall as it battles Apple on the high end and Xiaomi on the low end

Samsung's flagship Galaxy S5.

Above: Samsung's flagship Galaxy S5.

Image Credit: Devindra Hardawar/VentureBeat

Samsung has released its second-quarter earnings report, and the news is not as sunny as you’d expect for the world’s #1 maker of smartphones.

The South Korean company posted an operating profit of $7.1 billion, significantly off the analysts’ estimates of about $8.5 billion for the second quarter of 2014.

This is the first time in two years that the company has posted quarterly earnings below 8 trillion won (about $7.9 billion).

Bloomberg reports that the company is hurting on both its high-end and low-end market segments. On the high end, #2 smartphone maker Apple is cutting into the company’s sales. An expected large-screen iPhone 6 later this year will further eliminate Samsung’s traditional advantage versus iOS devices: Its huge displays.

On the low end, cheap Chinese smartphone makers like Xiaomi (which poached senior Android exec Hugo Barra in August, 2013) and LG have successfully nibbled away at its market share.

Shares of Samsung fell 1.1 percent to 1,292,000 won yesterday, Bloomberg reports, adding that the company’s stock fell almost 10 percent in 2013, its first yearly decline since 2008.



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