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Samsung Profits Drag iPhone, Chinese Attack

By Oonagh Reidy | Wednesday | 08/01/2014

Profit growth slows, as Koreans battle low cost mobile invasion, and iPhone 5s

Intense competition from Apple and cut price mobiles from Chinese vendors blamed, as demand for Samsung's Galaxy S4 stalls.  

The world's largest phone maker posted its first profit decline in nine quarters for the period October - December, as its rolls out an army of new Galaxy mobiles, Tabs, Note Pro, Curved 4K TVs and the worlds biggest 110" UHD TV at CES, this week. 

Samsung said total Q4 sales rose 5.3% to 59 trillion won or US$55.2bn. The Korean giant posted an operating profit of US$7.8bn - lower than the figure posted the same time 2012. 

This figure also fell short of analyst estimates of 10 trillion won for the quarter, reports Bloomberg, who notes the electronics giant paid out a substantial $700 bn bonus to workers during the three months. 

Samsung's mobile division is its biggest profit earner and analysts believe phone sales rose 19%, according to a Bloomberg poll. 

The behemoth does not break down mobile sales but Samsung held a 32% share of smartphone market in Q3 selling 80 million devices. Analysts believe Q4 figure was around 91 million.

The Koreans are believed to be launching its flagship Galaxy S5 soon, some are saying they may even pull it out of the bag at CES 2014, taking place in Las Vegas. 

However, its not all bad news for Samsung.

Predictions from Gartner, released today, suggest demand for PCs, tablets, mobiles and the new 'ultramobiles' - all areas where Samsung is a big player -  will soar by almost 8% percent to reach 2.5 billion units in 2014. 

However, demand for Android devices will come mainly from emerging markets, say analysts. 

The Galaxy S 4 maker has previously said developing affordable, smartphones for emerging markets as demand for premium phones in developed economies tapers off, predicting a mobile war with low cost Chinese vendors , including  ZTE, Huawei. 

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