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Samsung reports a decline in mobile phone sales

Sales slow

Mobile giant Samsung has revealed its Q1 2014 financial results today, showing a 4 per cent decline in smartphone sales.

For January to March, the company’s earnings release reveals sales declined quarter-on-quarter in the crucial mobile communications division, with revenue from mobile sales at ₩31.36tn (£18.1bn).

However, operating profit in the mobile and IT sector rose by a huge 18 per cent; Samsung said this was due to “smartphone shipment growth, efficiently managed marketing expenses, and positive impact from one-time expense adjustments”. Despite this, it was still down compared to Q1 2013.

Meanwhile the company as a whole – including the consumer electronics, device solutions and OLED display panel divisions – reported a net profit of ₩7.57tn (£4.4bn), up on ₩7.3tn last quarter, and ₩7.15tn year-on-year.

S5 hopes

In a press release, Samsung said that demand for both tablets and mobiles was lower in this quarter due to traditionally weak seasonality. In spite of this, the company saw strong sales of its Galaxy S4 and Note 3 handsets, and also unveiled the new flagship S5 handset (pictured) – Samsung said it hopes to “maintain solid earnings momentum through full-fledged global sales of GALAXY S5”.

However, news broke this week that a small number of S5 handsets may have been shipped with a faulty camera. Customers affected have been promised a replacement.

Growth strategy

Samsung has also revealed how it plans to improve its fortunes going forward. Areas of focus for Q2 2014 include increased sales of ultra high definition TVs due to the World Cup, its premium smartphones, and the emerging wearable tech market.

Kleon West, business development director at theEword, commented: “While it continues to boast around 30 per cent of the global smartphone market share and constantly release exciting new products, Samsung doesn’t have much to worry about. It will be interesting to see how the S5 sells and how it affects their Q2 results.”

Written by Rachel Hand

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