Sunday 25 March 2018

Earnings spark fear Samsung smartphone dominance on wane

A man uses his mobile phone in front of a Samsung mobile shop in Seoul
A man uses his mobile phone in front of a Samsung mobile shop in Seoul

Miyoung Kim

Electronics giant Samsung missed already modest expectations for its quarterly earnings guidance, deepening worries that its smartphone business may have peaked.

The news sparked fears that sales of its blockbuster Galaxy phones could be on the wane as new rivals emerge to eat away at its market share.

It also sent Samsung shares down more than 3pc.

That is despite the fact that Samsung's 9.5 trillion won (€6.4bn) operating profit forecast is a record and the company is expected to report higher earnings in the current and fourth quarters as sales of its latest Galaxy S4 phone pick up and new products hit the stores.

The Galaxy S, powered by Google's free Android platform, propelled the South Korean firm to the top rank of smartphone makers in 2012, overtaking Apple, whose iPhone had set an industry standard five years earlier.

Now investors fear Samsung may follow in the footsteps of Apple and other once-mighty players struggling with shrinking margins in a sector where companies live and die by their ability to stay ahead of the innovation curve.

"Is Samsung's smartphone story now over? Not quite yet. It's growth is indeed slowing due largely to disappointing sales of the S4," said Jung Sang-jin, a fund manager at Dongbu Asset Management, which owns Samsung shares.

"Yet I think Samsung has some exciting stuff up its sleeves." (Reuters)

Irish Independent

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