If you are judging just by the standard news headlines, Samsung had a pretty rough 2016. From some of its phones exploding and, eventually being banned on U.S. airplanes, to washing machines that also exploded and launched lids across the room like giant Frisbees, the company faced a pretty steep uphill PR battle.
Top execs were forced to recall and replace certain handsets and washing machines, and with each announcement came another negative headline. But there’s a fairly bright silver lining for a company you might think was in a serious downturn.
Even after all the mistakes, miscues, and negative press, Samsung is surging. The company posted a 50 percent profit boost in the final quarter of 2016, up to the highest level in about three years.
How does this compute? Well, literally, actually. Samsung can thank its semiconductor business for maintaining profitability even during the ups and downs of consumer PR fiascos. Microchips were in high demand, and supply was relatively new in the final quarter of 2016, allowing Samsung to cash in despite any other problems the brand might be having.
But not all the news is good. Despite the higher profit margin bringing them great profits, the company still saw sales fall about one percent. The takeaway? While preferable currency exchange rates and solid demand kept them well into the black, the consumer PR issues could eventually catch up with the company … especially in an increasingly competitive market.
Not that long ago, if you wanted a mobile device – either a phone handset or tablet – there were two top dogs – Apple and Samsung – and a host of also-rans hoping to run a distant third. Then Google landed on the market with both tech giant feet, unleashing the hugely popular Pixel phone in a direct challenge to both the iPhone and the Samsung Galaxy.
The Pixel was received with glowing reviews by tech pubs and market watchers, and it’s only a matter of time before consumers decide to give Google a go. The Pixel’s emergence could not have come at a better time. With certain Galaxy models literally exploding and the new iPhone 7 universally underwhelming both critics and consumers, the market was ripe for a legitimate third choice.
Samsung is profitable, but they have some ground to make up with consumers in 2017. Now they have an additional marketplace challenge to deal with as they work to regain lost ground.