Samsung wary of smartphone competition

Despite announcing significant profits for Q1, Samsung admits more competition in the smartphone market could affect its figures

Smartphone sales have secured solid profits for Samsung in the first quarter of 2013, but the South Korean company today warned it expected the market to get tougher in the coming months.

Samsung reported revenues of 52.87tn won (£30.8bn) – down from the 56tn won from the previous three months, but up by almost 15% year-on-year.

Net profit came in at 7.15tn won, although consolidated operating profit was 8.78tn in line with the predicted figures the company published earlier this month.

The IT and mobile communications (IM) division – which includes the company’s smartphone business – brought in 32.82tn won alone, up 7% from the previous quarter.

Samsung thanked “sound sales” of its two leading devices – the Samsung Galaxy S III and the Samsung Galaxy Note II – for the boost, but also its network infrastructure business, which sold a “stable supply” of telecoms equipment for 4G deployments.

However, it warned the smartphone industry was becoming more crowded and the fight for market share was on.  

“Looking ahead, Samsung anticipates smartphone sales to stay flat in the second quarter but will pick up again in the second half of the year,” read a statement from the firm. “As more mid- to low-end mobile devices enter the market and new premium products are rolled out, the race for market share will intensify.” 

“The company will strive to remain competitive amid difficult conditions by expanding the line-up of smartphones and tablets this year, starting with Galaxy Note 8.0 and the flagship Galaxy S4 smartphone.”

Samsung was affected by the low PC sales of recent months, with its display business slowing as a result. However, smartphones again helped win the day with increased shipments of handset screens preventing “steeper losses” in the division.

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