Samsung reveals first annual profit fall in three years

Company has also forecast a 37.4% fall in quarterly operating profit from a year earlier

Tags: Samsung Electronics CompanySouth Korea
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Samsung reveals first annual profit fall in three years Analysts agree competition in the smartphone market, particularly in Asia, has become more intense than ever. (JUNG YEON-JE/AFP/Getty Images)
By  Helen Gaskell Published  January 8, 2015

Samsung Electronics has confirmed expectations for its first annual profit decline since 2011.

According to online reports, the South Korean company lost market share for three consecutive quarters up to July-September, and analysts say the trend likely continued in the October-December period thanks to competition from Apple Inc's new iPhones and cheaper Chinese rivals like Xiaomi Inc.

"I think the company will show a turnaround," said CIMB analyst Lee Do-hoon, pointing to the positive outlook for Samsung's foundry and display panel businesses this year.

The tech giant forecast a 37.4% fall in quarterly operating profit from a year earlier. The firm's final fourth-quarter earnings are expected later this month.

Analysts agree competition in the smartphone market, particularly in Asia, has become more intense than ever.

Chinese handset maker Xiaomi, with which Samsung competes on the domestic front in China, said on Monday it had more than doubled its revenue in 2014, just a week after it was named the world's most valuable tech start-up.

"Xiaomi has proven to be very, very successful and is number one in China already," Andrew Milroy from Frost & Sullivan said.

"More than that, the firm has come from nothing in the last couple of years, so Samsung has to start being more competitive."

Milroy said the South Korean electronics giant had to focus on innovation in order to get ahead.

"It's not come out with anything spectacularly innovative recently," he said.

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