Samsung lowers profit forecast amid increasing competition

The Samsung S5 comes with a new, imitation-leather back - but it's business as usual for the user interface.

Samsung is set to report a second fall in quarterly profits, as the world’s biggest TV and mobile phone maker comes under increasing pressure from discount Asian rivals.

Despite a recent high profile marketing push featuring a ‘selfie’ from the front row of the Oscars, the South Korean electronics giant today said profit for the January to March quarter was set to be around 8.4 trillion won – 4% lower than the same quarter last year.

The figure marks Samsung’s second fall in quarterly profits in a row. Prior to this, profits had risen every quarter for over two years, driven by sales of its Galaxy range of handsets and tablets.

But Samsung faces increasing competition from local smartphone manufacturers in Asian markets.

Richard Holway, chairman of TechMarketView, said: “ It is the age old problem where a profitable market gets commoditised. Unit prices plunge and take the profit margins of anyone prepared to compete with them. You can buy a halfway decent touchscreen smartphone for c$60 now.”

Analysts also fear demand for smartphones may be waning in the West, as markets become saturated. iPhone maker Apple warned at the start of the year that revenue for the current quarter could be lower than last year, in what would be the first sales drop since 2003.

News of Samsung’s profit dip comes amid a sell-offs of tech stocks across world markets, with major operators such as Google, Amazon and Facebook all falling.