Samsung's electronics division is often described as the jewel in the company's crown, and its smartphone business is what gives this gem its sparkle. In the first quarter of 2014, mobile accounted for more than three quarters of Samsung Electronic's operating profit, but since then things have taken a turn for the worse, with the division's earnings falling 42 percent last year. A new report from The Wall Street Journal shows how Samsung has been shifting gears to deal with this challenge, including sending tens of thousands of machines to its factories in Asia to help the Galaxy S6 match the premium, metal construction of Apple's iPhones.
Samsung has switched chips and dropped products to boost profits
"To switch to aluminum-alloy bodies similar to what Apple uses, Samsung shipped more than 20,000 metal-milling machines to its Vietnam factories," says the report. The company has also aimed to boost profits by using its own chips in the Galaxy S6 and cut costs by trimming its sprawling product line — previously the company's signature mobile strategy. While Samsung's massive scale was once its greatest asset, allowing it to make bumper profits as long as its smartphones sold in huge numbers, this advantage has been eaten away as consumers have turned to low- and mid-range Chinese devices.
The question is now whether or not the S6 can turn things around for the company. After positive reviews, company executives have said that they expect the S6 and S6 Edge to be the best-selling devices in the Galaxy series, predicting that they will sell more than 70 million units. However, with recent shipment figures from China showing Samsung slipping into fourth place behind Apple, Xiaomi, and Huawei, the future of the company's mobile division is still far from certain.
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