Samsung's profit falls for the first time in two years

Samsung's quarterly profit fell for the first time in two years, as sales of smartphones and tablets have slowed down in developed countries. Yesterday, the company announced operating profit estimate of 8.3 trillion won ($ 7.8 billion) for the last three months of 2013, 6% less than the year before. The result was lower than expected by analysts and represented a fall of 18% over the third quarter. Sales rose 5 percent, to 59 trillion won ($ 55.4 billion).
Since the last three months of 2011, Samsung's operating profit has increased each quarter, peaking at 10.2 trillion won during the period from July to September. The fourth-quarter performance shows that the explosive growth in the lucrative business of Samsung mobile devices sector ceased.
The company will disclose its net profit for the fourth quarter this month.
Analysts said Samsung's profit fell because their suppliers of advanced screens and chips for iPhones and smartphones Galaxy obtained a smaller gain. According to them, the Samsung's business in the production of smartphones and smart watches Galaxy Galaxy Gear were not as lucrative as before due to higher marketing costs.
"It's a shock in profits," said analyst James Song, on KDB Daewoo Securities. "Profit from operations with mobile devices must have been much smaller than expected". Song had estimated that Samsung would have an operating profit of 9.3 trillion won.
Samsung Electronics's business involving smartphones also face increased competition in China. Starting next week, the American Apple will start selling iPhones in the country through China Mobile, the largest mobile phone operator in the world, a novelty that may threaten the growth of Samsung in the Smartphone market.
The Samsung had 21% of market share in the Smartphone market in China during the third quarter, up from 14 percent a year earlier, while Apple's share fell from 8% to 6%, according to research firm Canalys.