Samsung’s new Galaxy phone struggles amid sales gloom

More and more people owning smartphones and cheaper competition from China means Samsung’s new Galaxy phone is struggling.

The South Korean electronics giant today forecast worse-than-expected profits for the second quarter, fuelling fears over sales of its Galaxy S4 handset. 

Samsung, which has teamed up with Jay-Z to give Galaxy smartphone owners his new album Magna Carta Holy Grail before its general release, has suffered a series of downgrades from brokers over the past month amid concerns that its latest handset is not selling as well as hoped.

The firm said it expects profit for the April to June period to come in at 9.5 trillion won (£55 billion) on sales of 57 trillion won, less than the 10.16 trillion won analysts had predicted.

Benedict Evans, a technology and telecoms analyst at Enders Analysis, said: “Samsung is facing increasing pressure from cheaper Chinese manufacturers and its latest flagship, the Galaxy S4, had a muted reception. Smartphones are now over half of global phone sales and growth may be starting to slow down.”

Samsung fell more than 3% on the back of the profit announcement and shares have fallen 15% since the beginning of June.

Earlier this week Samsung acquired Israeli set-top box maker and media-streaming specialist Boxee, signalling that the firm may focus on its internet-connected “smart” TVs to help drive growth.