South Korean electronics manufacturer Samsung has forecast a 25% drop in profit for its second quarter following slowdown in the smartphone market and a stronger Korean currency. Its operating profit has fallen for three consecutive quarters.
The mobile phone manufacturer forecast operating profit of 7.2 trillion KWR (£4.2bn) for its April-June quarter, dropping from 9.5 trillion on the same quarter last year. The South Korean firm expects to post revenues of 52 trillion KWR (£30 bn) for the three months to June 30.
The company said it had witnessed a slowdown in the overall smartphone market growth with increased competition in the Chinese and some European markets during the period. The stronger Korean currency had damaged Samsung's earnings during the quarter with the won rising in value against the dollar, affecting Korean exporters.
Analysts believe that profit margins in the smartphone industry are likely to fall further. Richard Windsor of Radio Free Mobile said that while Samsung is putting a brave face on things, he suspects that the coming quarters will report more of the same rather than the much hoped for recovery.
'Samsung is hoping that new models in Q3 will boost its shipment numbers and margins, but it has already launched its key product for 2014,' he said.
'I believe that this is the first of many quarters where Samsung bemoans the aggressiveness of its competitors.'