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Samsung struggling to increase revenue

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October 7
1:14 AM 2015

The world's largest smartphone manufacturer, Samsung is struggling to increase its market share after the company continuously reported a decline in profit. The first decline is reported back in its third quarter revenue in 2014. Investors are anxious to see what Samsung has in plan to ensure more revenue for their next quarterly report.

Reuters reported that the company has been doing lots of different fixes to increase its declining smartphone market share due to an increase in new manufacturers and market saturation, among them is focusing on selling the lower end smartphone design to consumers in India while replacing its plastic casing with a metal casing.

Currently, the high-end smartphone market is dominated by Apple while the lower end is dominated by Xiaomi. Besides re-planning, Samsung also planning to create a new demand in smartphone industry according to IBK Asset Management, Kim Hyun-su. He also noted that Samsung is currently in a stagnant period.

Samsung is expected to announce its quarterly report this Wednesday. The Economic Times said that the company stocks is trading lower ahead of the announcement. Its forward price-to-book ratio is currently at 0.9, the lowest since 2002. Samsung needs to regain at least $53 billion in dividend or share buybacks.

According to Yahoo News, smartphone manufacturers around the world are having trouble to compete due to the quick information transfer. New smartphone design or feature introduced by a manufacturer can be easily and quickly replicate by others. This includes the fingerprint recognition system which is first introduced in Apple has been widely used by lots of manufacturers including Samsung and Google in their latest Nexus flagship.

According to an analyst, Samsung needs to offer new software and service in order to drive sales. A good service cannot be easily replicate while having its own software with copyright registered will stop other manufacturers from stealing its idea. Samsung has begun introducing such move with its Samsung Pay service which enable users to complete a transaction using their Samsung device.

Samsung's mobile division is expected to fell 7.7 percent in the third quarter from its previous 10.6 percent even after the introduction of its latest flagship and new design, Samsung Galaxy Edge. Samsung is also expected to increase the market share of lower-end products and cutting the price for some of its previous models including the Galaxy S6.

Besides phone industry, Samsung enables to stay profitable because the company involved in many other sectors too. The company also obtained a contract to supply chips for Apple.

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