Samsung Mobile Falls, Profits Rise
Samsung Q1 sales fell 9% to 53.68 trillion won as mobile and consumer electronics demand weakens.
However, profitability remained intact with net profits lifted to 7.57 trillion won, a significant rise compared to Q1 2013.
Mobile sales fell 4% for the first quarter (Q1) 2014, while demand for consumers electronics (CE) including TV’s took a 21% tumble compared to Q4, according to results released today.
Samsung blamed lower seasonal demand for smartphones and tablets, plus increasing competition for the dip.
Operating profit fell 2% quarter-on-quarter to 8.49 trillion won. However, profits for Samsung’s mobile unit which accounts for a large proportion of the overall figure, rose 18% driven by higher smartphone shipments compared to Q4, although was lower compared to a year ago.
Sales of cheaper phones like Grand 2 were stronger during the quarter.
Looking ahead, Samsung predicts just slight growth for its Galaxy mobiles in Q2 with weak seasonality to continue, despite the release of the pricey new Galaxy S5 this month, and says competition will intensify citing new product launches by rivals.
On the TV front, there was single digital growth compared to Q4, but demand for 60″+ large-size LCD’s soared 95% year-on-year and ‘4K’ UHD TV sales also rose almost 50% in developed markets.
Higher demand for Ultra HD TV’s in China as Samsung reinforced its customer base there following a ramp up in February.
Meanwhile, operating profits in the CE unit fell a massive 71% compared to Q4.
However, the world’s largest TV maker predicts UHD demand to grow significantly as it unveils new models this year and a boost from the soccer World Cup.