Samsung Electronics (LSE: SMSN) is a big name in the consumer electronics field these days. Personally, I use a Samsung cellphone, color laser printer, LCD computer monitor and more. In many cases, Samsung products have entered my domestic due to good pricing, stylish quality and excellent craftsmanship. Those amenities are apparently not suitable to keep large profits flowing into South Korea’s largest company (by revenue).

Samsung continues to be the world’s largest seller of flat-panel screens (computer monitors and flat-panel televisions) and is a staple in the cellphone world, serving virtually every global market that exists along with nearly every wireless carrier in established wireless markets. But, even with that, the company’s share price is down 10% that year, and the company is expected to report its fourth straight quarter of declining profit. What’s happened?

Margins have plummeted in many areas where it leads, such as flat-panel technology and computer components (Samsung makes more computer RAM memory than any other company). The company has

been slow to create market-leading awareness in higher-margin businesses (like color laser printers), and its recent quarterly results show that. Are customers increasingly being more convinced with Samsung’s products, thereby waiting on upgrading and considering price as the main factor when they do? Perhaps.

Consumers in emerging markets have these same concerns as well (especially price), so where are all these new high-margin product segments at, soon after? That’s the magic 8-ball question. I’ll say that: I’ve owned a high-end Samsung cellphone since January of that year and don’t plan on upgrading it for a lengthy moment. Why? Well, it works great and has every conceivable feature I could ever need in a cellphone. Samsung doesn’t want to compose out that, though. In other words, it may be making many products so good that customers have a stagnating need to buy the latest and greatest.

Original post by Brian White

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