Samsung, maker of the world's most popular smartphone, says its first quarter results were impacted by traditional seasonality, an issue it expects to spill over to the three months to June as demand will only increase slightly.
For the first three months of the year - a period that excluded its new Galaxy S5 - revenue slowed quarter-on-quarter, dropping from 59.28 trillion South Korean won (₩) to ₩53.68 trillion, although the handset maker did report a year-on-year revenue rise of almost ₩1 trillion. Its net profit, 14.1% of sales, gained quarter-on-quarter and year-on-year to ₩7.57 trillion, thanks to efficient management of expenses.
In its earnings guidance disclosed on 8 April, the manufacturer estimated first quarter consolidated revenue would reach around ₩53 trillion. Reuters notes, according to Strategy Analytics, its shipments gained 28%, to 89 million, between January and March, but it lost market share to Chinese and other rivals.
The wire service reports Samsung's market share fell to 31.2% from 32.4% a year ago, while Apple's share went from 17.5% to 15.3%. China's Huawei's share remained stable at 4.7%, and Lenovo gained from 3.9% to 4.7%, reports Reuters.
Growing competition
Samsung reported mobile sales 4% lower, while consumer electronics declined 21% over the last quarter of 2013. It expects "slight" growth in the second quarter in the smartphone unit, which is its biggest contributor to operating profit.
Tablets, which Samsung also expects to grow slightly, will experience increased competition, it adds. High-end smartphone demand will be bolstered by a move to long-term evolution, while emerging markets will see demand growth and increased competition, its results note.
The group, maker of the world's most popular handset in the smartphone segment, noted there was lower device demand in the market amid weak seasonality, leading to increased channel inventory due to "intensified" competition.
The upcoming Fifa Soccer World Cup, in Brazil, is expected to bolster television sales, Samsung notes. Senior VP Robert Yi notes overall earnings should start improving from the second quarter.
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