Samsung, Apple, HTC warn of squeeze


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The Independent Online

Cut-throat competition between smartphone and tablet makers will intensify in the run-up to Christmas, industry experts warned yesterday after Apple, Samsung and HTC gave cautious outlooks on their key selling season.

Samsung, the world’s biggest seller of smartphones with its Galaxy range, smashed third-quarter profit expectations but its shares fell as it said competition will get tougher in the final quarter as the global economy slows and manufacturers launch new mobile devices.

“We will do our best to sustain our earnings momentum throughout the fourth quarter by implementing strategies we have developed for our businesses,” said Robert Yi, head of investor relations. He added: “The business environment remained difficult with global economic uncertainties persisting amid the fiscal concerns in the US and Europe.”

Samsung’s post-tax profit soared 91 per cent in the third quarter to 6.56 trillion won.

On Thursday night, Apple disappointed investors with a lower-than-expected forecast for final-quarter earnings as it admitted the launches of the iPhone 5 and iPad mini would dent profit margins. The finance director Peter Oppenheimer said gross profit margins on the iPad mini are “significantly below our corporate average”.

HTC, which has struggled with its Microsoft phones against Samsung’s Android devices, yesterday said it expects final sales to be the lowest for any quarter since the start of 2010.

But what really spooked analysts was HTC’s prediction its operating margin would shrink from 7 per cent in the third quarter to 1 per cent in the final quarter. Its third-quarter profits dropped by 79 per cent.

Research firm Strategy Analytics said Samsung sold 56.9 million smartphones in the third quarter, giving it a record 35 per cent market share.