Samsung Struggles to Return to Its Glory Days

What a difference two years makes.?In 2012?Samsung was behind?a third of all smartphones sold in the?world and smashing through its profit record for the fourth quarter. Now Samsung?s global market share has dropped to 25%, and profits are looking lacklustre alongside Apple?s historic earnings blowout yesterday.

Samsung?s fourth-quarter profits fell 27% to $4.9 billion. The company said it sold between 72.2 million and 75.1 million smartphones in the quarter ? and while that?s on par with Apple?s record 74.8 million-iPhones-sold in the same period, Samsung doesn?t have anywhere near the 39% gross margins that Apple does.

Samsung?s operating margin fell by 400 basis points to 10% from last year. while its EBITDA margin slid to 18% in the fourth quarter from 21% last year. Operating profits at Samsung?s mobile division, which made up half the company?s sales in 2014, dropped from $5 billion to $1.8 billion in the fourth quarter, year-on-year.

Samsung said that it had been cutting costs in areas like marketing to help offset the decline in smartphone shipments, but the company expects competition in the already-cutthroat smartphone market to ?intensify? in 2015.

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