Samsung profits slip as it feels the heat from rivals

Margins on Galaxy handsets especially squeezed

margins on galaxy phones being squeezed

First quarter results from Samsung Electronics, the division of the South Korean manufacturing giant that makes smartphones, show profits slipped 3.3 per cent in the wake of increased competition. At 6.43 trillion won (£3.71 billion), they were down 1.2 per cent from 6.51 trillion won a year earlier. Samsung admitted it expected the weakness to continue into Q2 as margins on its Galaxy handsets continued to be squeezed and competition hotted up in the low to mid range handset sector.
Samsung’s smartphone division accounts for 58 per cent of the group’s global profit and, following the news, the company’s shares fell 2.02 per cent in Seoul.

The company told journalists that, “the global markert for smartphones is maturing” but it expects its TV division to do well with the forthcoming World Cup [soccer] tournamengt in Brazil.

Meanwhile fellow South Korean handset maker, LG, posted a 7 per cent slowdown in its own handset sales compared to the previous quarter.

About Dave Evans

Dave Evans is a long established commentator on both the IT and cellular industries. His current focus is on share price trends within the sector. You can email him here
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