Samsung’s profits slide on slower smartphone sales


Things are no longer looking quite so rosy and beautiful over at Samsung, although it remains the world’s number one smartphone maker by some distance. Even so, its business has taken a knock in recent months, with Bloomberg reporting that the Korean company has posted its slowest growth since 2011.

Samsung’s operating profits for Q4 2013 slipped to ‘just’ 8.3 trillion won ($7.73bn), despite tablet demand increasing “substantially”. The South Korean company blamed a quarter-on-quarter dip in mobile earnings on an increase in marketing costs and other one-off expenses, while smartphone sales rose quarter-on-quarter but failed to quite match the highs of Q4 2012.

One things for sure, Samsung’s bosses won’t be best pleased about the news, and will be looking around for someone to lay the blame on. But why has it’s sales growth slowed down? That’s not immediately clear, but what we do know is its facing an increasing challenge from emerging smartphone makers like Lenovo and Huawei, which have been flooding markets in Asia and elsewhere with cheap and cheerful handsets that are every bit as good as Samsung’s. Aside from that, the company has also faced tough competition from Apple, whose iPhones have successfully lured away bigger-spending consumers from its flagship Galaxy range.

Samsung has enjoyed remarkable success in the mobile arena for quite some time now, but it’s not going to be easy to retain its number one spot in the longer term. The company said it “planned to lower its mobile marketing spend this year relative to revenue, after big promotional spending hit fourth-quarter profit,” reports Reuters. Maybe that’s not such a bad thing?

Elsewhere, over at Apple, the fruity company is reported to have fared an awful lot better, shipping a record-breaking 55 million iPhones over the last quarter. This is only an estimation of course, but we’ll get confirmation when the Cupertino company reports its Q1 financials next week.