Samsung posts profit warning amid smartphone sales slowdown

Samsung smartphone sales are expected to fall in Q2 2014

Samsung has said it expects both sales and profits to fall in its second-quarter financial period for 2014 as its Galaxy range of smartphone suffers from a sales slowdown.

Samsung said that it now expects overall sales of 52 trillion won (£30bn), down from 57.46 trillion won in the same period in 2013, and down from 53.7 trillion won in the previous quarter.

Furthermore, it says profits will be 7.2 trillion won (£4.2bn) in the quarter, down from 9.5 trillion won a year ago and 8.5 trillion in the previous quarter.

Samsung did add that the results could change when it releases its full financials, although usually such guidance proves accurate. “The guidance is provided ahead of the full announcement of quarterly earnings results for the convenience of investors and media, before our external audit on the financial results of our headquarters, subsidiaries and affiliates is completed. Therefore, the above estimate may differ from the actual results,” it said.

The official Q2 2014 earnings announcement is likely to take place before the end of July, three months after its last release in April.

The fall underlines the problems Samsung is facing as its growth over the past few years starts to slow, due to both market saturation of its Galaxy smartphone range, and increased competition.

Previously there were few, if any, true Android rivals to its Galaxy devices, especially the S3, which the firm launched in 2012. Now Samsung’s newest devices, such as the S5 pictured above, face serious rivals such as the Sony Xperia Z2 and the new LG G3.

Furthermore, its large-screen devices, such as the Note 3, will likely come under more pressure from its chief rival Apple, which is expected to unveil a large-screen version of the iPhone later this year.

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