By Stephen Schenck | January 24, 2014 12:13 PM
It’s that time again when companies are publishing their earnings data, and last night we took a look at how Microsoft and Nokia have been doing. Some of the companies in the smartphone game are laser-focused on mobile devices; take HTC, for instance – smartphones (and the odd tablet) are all it does. On the flip side, we have these big conglomerates like LG or Samsung that have plenty of diverse interests, with the phones themselves only acting as one component. Lately, we’ve been talking about Samsung and reports of its smartphone growth slowing down – and this idea’s been at the forefront of rumors suggesting an early launch for the Galaxy S 5. But just how important are smartphone sales to a company like Samsung, with other avenues of income? That chart up top should spell it out pretty clearly, revealing the incredible extent to which Samsung’s profits have become tied to smartphone sales.
To be clear, this isn’t the entirety of Samsung’s interests – these numbers appear to just reference Samsung Electronics in particular – but even with that constraint, it’s fascinating just how large a role smartphones have evolved to take.
We see right in mid-to-late 2010 how the balance starts shifting (and that correlates quite nicely to the release of the first Galaxy S), and over the next two years, smartphone sales rose to dominate profits. Then about two years ago things started leveling off, and while there’s been a little jostling ever since, it looks like the rapid growth is a thing of the past.
It’s precisely this situation which may be causing Samsung to panic a little – where can it go from here, or is it just going to stagnate? What we see as risky attempts to expand its market – projects like Tizen – Samsung may view as its only options for breaking out of this rut it’s found itself in.