The Wall Street Journal has reported that Samsung is gearing up to enter a cost cutting mode in 2015. The company is planning to sell fewer smartphone next year as part of a plan to tackle declining profits.
The South Korean electronics giant is said to cut the number of smartphones between 25% to 30% in 2015.
Samsung recently had a massive drop in mobile profits (74%) and missed analyst estimates due to increasing competition from Chinese companies like Lenovo and Xiaomi.
After maintaining smartphone operating-profit margins above 15% for 10 consecutive quarters, Samsung’s margins from its mobile and information technology business were squeezed to just 7% in the third quarter ended September—the lowest level since the end of 2008, before it launched its first Galaxy smartphone. Acknowledging the slide in margins, Samsung executives said during an earnings call last month that its new goal is to maintain a sustainable double-digit percentage margin starting in the new year. They reiterated that pledge during this week’s investor day meeting.
The company has not yet revealed what models will be discontinued.
