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Samsung will 'fundamentally reform' its smartphones after dire earnings report

Samsung will 'fundamentally reform' its smartphones after dire earnings report

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Samsung's earnings this past quarter have been exactly as downbeat as the company predicted: operating profit is down 60 percent and income from sales is now 20 percent smaller than a year ago. In other words, Samsung's spending more money to generate smaller revenues. This has all been down to Samsung's most lucrative and important mobile devices business, which has been struggling to adapt to a new competitive environment. Addressing the need for radical change, Senior VP Kim Hyun-joon from Samsung's mobile division has today expressed the company's intention to "fundamentally reform [its] product portfolio." Seeking greater cost efficiency, Samsung will look to standardize components used across devices and will continue to compete "for each price tier."

Sony recently announced plans to also reorganize its mobile efforts, though its focus appears to be on more premium, high-end devices whereas Samsung looks set to maintain a wide portfolio while taking a different approach to how it structures it. Kim admits that Samsung's "high-end smartphone sales result was somewhat weak" in the past quarter and the company's earnings report describes the impact of the new Galaxy Note 4 as only "marginal." There's plenty of work ahead for Samsung, but if the company lives up to the promise made today, 2015 will be a fundamentally different year to the repetitively iterative products the company has been serving up in recent times.