forecasting it would report a record quarterly profit for the second
quarter of 9.5tn won (£5.5bn), up 47% on a year ago.
But the news fell short of analysts' expectations and the shares fell
by nearly 4% on the Seoul stock market.
The company was preparing to announce 20m shipments of its new Galaxy
S4 phone, two months after its release but analysts are increasingly
concerned that Samsung, like its principal smartphone rival Apple, is
facing saturated markets in the developed world as ownership passes
50% in many countries.
Average smartphone ownership in the US and Europe is heading towards
60%, leaving few new buyers to expand the business at the high end.
Mobile network operators are also cutting subsidies for phones, making
high-end phones more expensive.
South Korean networks cut subsidies for new phones this year,
contributing to weaker Galaxy S4 sales in Samsung's home market and
higher marketing spending for the handset maker, said Seo Won-seok, an
analyst at Korea Investment & Securities.
China is the fastest growth area in smartphones, but at low prices
with highly competitive markets. Samsung has been releasing cut-down
versions of the S4 to try to protect its market share from rivals such
as ZTE and Huawei.
The saturation at the top end of the market seemed to be reflected in
Samsung's Galaxy S4 figures. Though shipments of the S4 in the first
month after release were twice as high as for last year's Galaxy S3,
the time it took to reach the 20m mark suggested shipments were
slowing to a rise of only 60%.
The company still dominates the smartphone and "featurephone"
business, shipping about half of all smartphones and a quarter of all
mobile phones worldwide. It is the biggest seller of phones running
Google's Android software, taking about 95% of all profits in the
Android space.
Samsung said total sales in its electronics division had grown 20% to
57tn won (£33.2bn). It will announce its full audited quarterly
results this month.
Analysts suggested that high marketing costs – which exceeded those
for research and development for the first time in three years – may
have hit the profit figure, despite the strong first-month sales.
"Because of the marketing costs, the telecommunications business was
probably weaker than expected," said CW Chung, an analyst at Nomura
Financial Investment in Seoul. "Semiconductor and other businesses
seem to have improved from the previous quarter."
Analysts cut their figures last month for the total numbers of S4
phones Samsung will ship this year from 80m to 60m.
"Apple is suffering from iPhone fatigue, while Samsung is suffering
from Galaxy fatigue," Neil Mawston, executive director of Strategy
Analytics, told Bloomberg before the financial announcement.
Samsung is increasingly reliant on its mobile business for growth.
Samsung's division making and selling mobile phones, tablet computers
and cameras contributed 75% of its operating income in the first
quarter of this year. Analysts surveyed by FactSet said 60% of
Samsung's second-quarter sales probably came from the mobile business.
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