After posting the lowest quarterly profits in three years, Samsung Electronics plans to completely overhaul its phone lineup. The company will focus on “efficiency” in future next quarters, indicating they may be reducing the number of new smartphones.
By decreasing their portfolio of phones, Samsung can focus on each device individually, buying cheaper components and reducing production costs. The South Korean phone giant became the market leader in smartphones over the last three years, but the company’s rapid success is already being met with a steep decline in sales.
Samsung began losing money in the mobile phone business early this year with the disappointing sales of the Galaxy S5. A new generation of low-priced phones that were introduced on the global market added to their sales woes.
Samsung’s decline last quarter was significant. Net profits dropped 49% to the lowest levels since the first quarter of 2012. However, it was still above market expectations.
Mobile operating income, which accounts for over 60% of Samsung’s overall earnings, fell 74% during the third quarter versus year ago levels.