Samsung Records 11 Percent Fall in Q4 Net Profit, First Time Since 2011

By Vivek

| Published: Friday, January 24, 2014, 12:58 [IST]

Despite the burgeoning demand of the Samsung's smartphones and tablets in the market, the company has, for the first time in two years, seen a downward slope in their quarterly net profit graph.

Samsung Records 11 Percent Fall in Q4 Net Profit

The South Korean smartphone manufacturer reportedly said that its net earnings for the October-December period fell 11% from the third quarter to 7.3 trillion won ($4 billion). Samsung says that the loss was due to the high marketing costs to promote Galaxy devices and other one-time expenses, such as special bonuses to employees.

Reportedly, Robert Yi, head of investor relations, Samsung, said that it would be difficult for the company to yield earnings during the first quarter of this year as display panels and TV businesses would probably be weak compared to the smartphones and tablets business which are still growing excessively.

Since the success of its smartphone division has been one of the biggest drivers of Samsung's growth in recent years. It helped the company displace Nokia as the world's biggest phone maker in 2012.

Samsung's all time rival Apple has been creating a competitive ground for the company globally. And in the Indian market as Apple re-launched iPhone 4 at a very nominal price, Samsung would be somewhat effected to some extent.

However, Samsung still remains to be the best smartphone vendor in India. While Micromax has been giving it a great battle in the mid-range smartphones.

Reportedly, a Seoul-based analyst at NH Investment and Securities Co. Lee Sun Tae said, "Earnings will remain stagnant this year as the explosive growth of the past two to three years seems to have ended." He further added, "Although the lower-end smartphone market will continue to grow, the scale of profit from that segment doesn't compare to the high-end market so the growth seems limited."