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Tuesday, 08 April 2014 10:06

Samsung results see smartphone slow-down

Written by Nick Farrell

Second straight quarter decline

Samsung’s results are showing the effect of the general slow down in smartphone sales. The company said that it was on track to post its second straight quarter of profit decline. The South Korean tech giant estimated that its January-March operating profit fell by 4.3 percent to $7.96 billion, slightly below an average Wall Street forecast.

The world's biggest smartphone maker is counting on the fifth version of its flagship Galaxy S smartphone, which goes on sale globally from Friday, to sort out the mess. But the Galaxy S5 has already got off to a weak start at home, with its South Korean debut marred by a temporary ban on mobile carriers selling handsets. The phone has been criticised for not having any super-sexy new features. Then again, the S4 faced similar criticism, but it still went on to become the best selling Android phone of the year. 

Samsung priced the S5 about 10 percent cheaper than the S4 even though main rival Apple is not widely expected to update its line-up until September. Analysts said the company's efforts to rein in component costs and make products that appeal to a wider audience will be crucial as Samsung braces for what could be its first annual profit decline in three years.

They think that Samsung needs to do things like cost reduction and reducing marketing costs  to prevent a decline in its earnings. The stock is nearly 12 percent off the record high hit in January last year, weighed by worries over high-end market saturation and competition from cheap Chinese rivals.

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