SEOUL: Samsung Electronics reported on Tuesday a 5.9 percent year-on-year increase in first quarter net profit to 7.57 trillion won ($7.3 billion) but operating profit declined for a second straight quarter on slowing smartphone revenue.
Operating profit stood at 8.49 trillion won for the January-March period, down 3.3 percent from a year ago, following a 6.0 percent decline in the fourth quarter.
Overall sales in the first quarter inched up 1.53 percent to 53.7 trillion won, but were down 2.5 percent for the mobile business unit, which has driven the South Korean electronic giant’s record profits of recent years.
Alarm bells have been sounding for a while over Samsung’s reliance on smartphone sales in mature markets such as Europe and the United States, and increasingly competitive emerging markets such as China. The world’s largest smartphone maker has a diverse product line ranging from memory chips to home appliances, but more than half its profits are generated by mobile devices.
This month saw the global roll-out of the latest version of the flagship Galaxy series smartphone, the S5, whose performance will be closely watched.
While reviews have rated the S5 a top-class product, they note that it offers little in the way of real innovation that would set it apart from previous versions and models offered by competitors such as Apple. afp
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