News Column

Samsung Suffers Mobile Phone Sales Decline

April 28, 2014



Samsung Electronics has reported another quarterly decline in operating profits after sales of its mobile phones slowed.

The South Korean firm made $8bn (£4.7bn) in its first quarter - down more than 3% on the same January to March period last year.

Operating profits had fallen 6% in the fourth quarter of 2013.

The latest performance was largely blamed on smartphone sales easing back by 2.5% in the period amid stiff competition from the likes of Apple, which enjoyed a sales resurgence over the same months after its handsets became more widely available in China.

Samsung, which is the world's largest smartphone maker, has a diverse product line ranging from memory chips to home appliances but more than half its profits are generated by mobile devices.

This month saw the global roll-out of the latest version of its flagship Galaxy series smartphone, the S5, whose performance will be closely watched over the coming months.

While reviews have rated the S5 a top-class product, they note that it offers little in the way of real innovation that would set it apart from previous versions and models offered by competitors such as Apple.

Samsung made margin concessions with the S5, launching it at a slightly lower price than its predecessor the S4 and throwing in a premium software bundle.

The company has admitted it faced a tough road ahead as mobile demand would remain sluggish in the second quarter but it still expected sales of Galaxy S5 to beat the S4.

The company's bottom line was boosted by a 22.8% surge in memory chip sales from the first quarter of 2013.

It helped overall net profits top market estimates at $7.5bn (£4.4bn).

Its Seoul-listed shares were down 1.6% in late trade.

 


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Source: Sky News (UK)