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Samsung predicts second quarter of profit decline

South Korean vendor continues to suffer from shrinking smartphone market

Samsung predicts second quarter of profit decline

Samsung Electronics today said it expected to post its second straight quarter of profit decline as a result of slowing smartphone sales, Reuters reported.

The South Korean vendor projected its first-quarter operating profit to fall by 4.3% to KRW8.4trn ($7.96bn), slightly below an average forecast of KRW8.5trn by analysts.

Samsung is now pinning hopes on its next-generation Galaxy S5 to correct the decline, but lack of breakthrough features and a ban on carrier handset sales in its domestic market may hamper the handset’s impact.

The Galaxy S5 was treated to a less lavish debut than its predecessor, the S4, and priced about 10% less. Samsung has tried to reign in component costs to mitigate what is expected to be the company’s first annual profit decline in three years.

Samsung shares are almost 12% down on their peak of January 2013, because of investor concerns over a saturated premium market in smartphones and a low-to-mid-range segment that is rife with competition from cheap Chinese-made devices.

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