Samsung is one of many foreign smartphone manufacturers to see huge losses this year, as more Chinese flock to cheaper local brands. (Photo : Reuters)
Leading global Android smartphone makers are taking a beating in the Chinese market this year, as it struggles against stiff competition from local players and Apple.
Samsung, which dominated the Chinese smartphone market in the previous years, revealed that its operating profit between April and July this year is estimated at 6.9 trillion South Korean won ($6.13 billion), a 4-percent drop from 2014, the China Business Daily said in a report earlier this week.
The estimates fall sharply below that of the market expectation of 7.2 trillion won, leading to analysts downgrading their forecast for Samsung's results for the second quarter on the company's miscalculation of demand for its flagship Galaxy 6 and Galaxy 6 Edge models, the report said.
HTC, another frontrunner in the Android market, also posted net losses of $260 million for the second quarter when it released its unaudited results on July 6.
Although both companies have yet to reveal details about their performances in other geographical markets, their weaker-than-expected results are partly linked to their sales in China, the report said.
Antonio Wang, an analyst at market research firm IDC, said that foreign smartphone brands have failed to adapt to nuances of the Chinese market.
According to the IDC, Samsung's market share in China in terms of shipments fell from 20 percent at the start of 2014 to 8 percent during the fourth quarter, as the South Korean smartphone titan's premium brand strategy lost out to the cheaper models and more localized marketing offered by Chinese rivals.
Samsung was also hit by Apple's launch of iPhones with larger screen sizes and a stronger won, the company concluded in its financial results for the first quarter.
The 4-percent decline in operating profits for the second quarter actually reflected a relatively stable market environment, said Wang.
