Two of the world’s leading technology powerhouses, Apple and Samsung, have unveiled their latest financial reports. Fortunes couldn’t have been more polarised for two companies that grapple for supremacy in so many consumer tech industries.
Judging by these latest figures, there is only one winner at present.
Drinks on Apple
Beginning with Apple. Their previous quarterly performance would have taken some beating. At £11.8 billion, they netted the most profit of any corporation in history. Despite failing to reach the dizzying heights of three months ago- Apple still held the comforting consolation of posted their second largest earnings of all time.
Totals earnings for the first three months of 2015 amounted to a mammoth $58 billion (£37.5 billion), netting a cushy $13.6 billion (£8.7 billion) in net profit. Compared with the same figures released a year previously, revenue has leapt up by 27.2%, up from $45.6 billion, with profits up from $10.2 billion. Apple’s earnings per share also increased by an impressive 40.4%.
Of particular interest in Apple’s latest performance hit was their iPhone and Mac sales, which were the second highest on record. Similarly, an all-time record on the App Store was key to fuelling a year-on-year growth. Tim Cook mirrored Apple’s positive financials in a press release:
“We are thrilled by the continued strength of iPhone, Mac and the App Store, which drove our best March quarter results ever,”
“We’re seeing a higher rate of people switching to iPhone than we’ve experienced in previous cycles, and we’re off to an exciting start to the June quarter with the launch of Apple Watch.”
The final point of which is particularly pertinent. Apple are expanding their product range with the launch of the Apple Watch. Officially released on April 24th, Apple have been taking pre-orders for the in demand wearable since early April. Such is the level of buzz created around Apple’s latest release that consumers are able to book a 15-minute slot in your local Apple store to see how the watch looks on your wrist. As the device bleeds further into the public’s conscious, Apple will hope the device can fuel further growth in 2015.
Samsung Drown their Sorrows
Envious eyes will no doubt have been cast across Apple’s offices by Samsung, as their quarterly performance paints an altogether less prosperous picture. Net profit plunged from 7.49 trillion won (£4.45 billion) to 4.63 trillion won (£2.7 billion), a fall of 39% in Samsung’s year-on-year report. These figures fell well below Samsung’s own forecast of 5.9 trillion won in operating profit, and were compounded by a further fall in revenue. Slipping 12% year-on-year, overall revenue streams amounted to 47 trillion won (£28 billion) in the first three months of the year.
The continuation of Samsung’s downfall has been pinned on their mobile business. The 2.7 trillion won brought in by the mobile arm of the Samsung conglomerate represents less than half of the 6.43 trillion won raked in a year previously. Samsung have been hit hard by the iPhones performance, compounded by a rapidly increasing demographic for mid-ranged devices. Samsung have been encouraged by uptake in their most recent latest flagship device however, the Samsung Galaxy S6. At the time of release, Samsung stated that demand had been “much higher” than originally planned, and that the device had sold out in several stores across the world. They also stated their intention to spend less money on marketing in an effort to boost their margins, which did see a healthy 10.6% climb from 2014.
All is not well in the Samsung camp then, with these findings continuing a downward trend for the Korean tech giant. This is the third in a series of heavy blows. Profits fell by 27% for Q4 2014, a marked improvement on the 60% which occurred in Q3, their worst return since 2011.
The initial success of the Apple Watch, a market that Samsung have operated in for some time, could further diminish the potential for Samsung to expand in consumer tech markets. If profits continue to plunge in the same manner as the last 12 months, calls for revolution may become louder than those for evolution for the once industry leading company.