DESPITE MAKING A PROFIT of 7.57tn Won or £4.4bn in the first quarter of 2014, Samsung has revealed a four percent decline in mobile phone sales in its latest quarterly financial report.
In its first quarter earnings report for the period from January to March, the South Korean company's profits were up by two percent compared with the previous quarter, but it reported a four percent decline in handset revenue from 32.5tn Won in Q4 2013 to 31.3tn Won in the latest quarter. This is likely due to the usual slump after the Christmas holiday period and increasing competition from Android rivals such as Sony and HTC.
However, based on early sales figures, Samsung said it expects its latest Galaxy S5 flagship smartphone, featured in our video review below, to pick up sales and outsell its predecessor the Galaxy S4.
Overall, the firm took in 53.68tn Won or £31bn in the first quarter. This was down nine percent from the traditionally strong Christmas period in the previous quarter, but up from the same period last year.
The IT and Mobile Communications division at Samsung generated revenues of 32.44tn Won or £18.7bn, leading to profits of 6.43tn won or £3.7bn.
"Operating profits for the division jumped 18 percent compared with the previous quarter thanks to steady smartphone shipments, efficient execution on marketing expenditures and a positive impact from adjustments of one-off expenses," Samsung said.
Samsung did not give specific figures for Galaxy S5 smartphone sales, but its strong claim that it will outsell the Galaxy S4 so soon after launch suggests sales have been strong. For comparison, 10 million Galaxy S4 units were sold during the first month after it was released in April 2013.
Samsung also posted a 10 percent decline in semiconductor sales in the first quarter compared to the previous quarter. The Korean firm said that it is confident it will post strong financials for the rest of 2014, driven by uptake of TVs due to the World Cup in Brazil, and plans to launch more wearable devices. µ