Samsung prepares lower-end phones as Q1 operating profit falls

Samsung is preparing more lower-end phones for emerging markets

Samsung Electronics posted a dip in its operating profit for the first quarter, falling by 3.3 per cent year-over-year as the company faces growing competition in the smartphone market.

During the period, the company's operating profit reached 8.49 trillion Korean won ($8.2 billion). It marked the second consecutive quarter the operating profit has fallen.

Samsung's net profit, however, grew year-over-year by 5.9 per cent to 7.6 trillion won. The company's sales were also slightly up, reaching 53.7 trillion won, up 1.5 per cent from a year ago.

The South Korean electronics maker has been posting weaker earnings, after previously reporting profits in the double digits on surging smartphone sales. While the company's handsets still remain popular across the world, consumers are increasingly buying less pricier smartphones, especially in markets such as China.

However, Samsung said it continues to see "solid sales" for its higher-end phones the Galaxy S4 and the Note 3. The company also expects to see a boost in it earnings next quarter, with the launch this month of its newest flagship phone, the Galaxy S5.

Samsung projects that sales of the S5 will surpass the S4, which sold more than 10 million units in the first month after its launch last year. The company's mobile devices business makes up over half of its revenue.

For emerging markets, the company is developing more lower-end phones that will come with larger screens, and slots to carry two SIM cards, company executives said in an earnings call. Samsung also wants to incorporate the user interface features found its flagship phones into its existing mid-range handsets.

"There's continued growth in the $US100 dollar below market in smartphones," said Hyunjoon Kim, senior vice-president for Samsung's mobile communication business. "We will be adding new products to that price segment as well."

In this year's second quarter, the company's earnings will see an additional boost from better sales of its display panels and home appliances, Samsung said. Orders for its displays in high-end smartphones are increasing, and more TVs will be bought during the run-up to the World Cup in Brazil, the company added.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags smartphonesbusiness issuesfinancial resultssamsungconsumer electronics

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?