The glory days of massive profits at Samsung and Apple could soon be over as smaller competitors flood the market with new, cheap mobile devices this year.
Samsung, the world's biggest smartphone maker, yesterday sounded a warning about the outlook – even as it announced record profits of £4.2bn for the last quarter.
The South Korean giant said: "The furious growth spurt seen in the global smartphone market last year is expected to be pacified by intensifying price competition, compounded by a slew of new products.
"In the first quarter, demand for smartphones in developed countries is expected to decelerate, while their emerging counterparts will see their markets escalate with the introduction of more affordable smartphones and a bigger appetite for tablet PCs throughout the year."
Analysts say the new wave of Chinese manufacturers and established players such as Nokia, which is still strong in low-end phones, threaten both Samsung and Apple.
Samsung shares slipped 1.4 per cent but are still at close to a record high on the strength of bumper sales of the Galaxy S range of smartphones, which have hit more than 100 million in four years.
Samsung's performance was resilient compared to Apple, whose shares slumped this week following worse-than-expected sales of iPhone5.
Lee Se-chul, a Seoul-based analyst at Meritz Securities, said: "Smartphone shipments will continue to grow even in the traditionally weak first quarter, as Samsung's got a broader product line-up and Apple appears to be struggling in pushing iPhone volumes aggressively."
Samsung is set to launch the Galaxy IV smartphone in the spring.