Samsung hit by slowdown in tablets and smartphones

EE chief executive Olaf Swantee. Picture: Contributed
EE chief executive Olaf Swantee. Picture: Contributed
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Technology giant Samsung has suffered its first decline in quarterly profits for two years following a slowdown in smartphone and tablet computer sales in developed countries.

The South Korean group expects to deliver a still hefty operating profit of 8.3 trillion won (£4.7 billion) for the final three months of 2013, but down 6 per cent compared with a year earlier and below analysts’ forecasts.

Its Galaxy and Note devices use the Android operating system, and research group Gartner predicted yesterday that the number of smartphone and tablets shipped with the Google- owned software will exceed one billion this year, with the strongest demand coming from emerging markets.

Bitter rival Apple last month struck a deal to sell its iPhone models through China Mobile, the world’s largest network, piling even more pressure on market leader Samsung.

According to research firm Canalys, Samsung had a 21 per cent share of China’s smartphone market in the third quarter of last year, up from 14 per cent a year earlier, while Apple’s share declined from 8 to 6 per cent.

BNP analyst Peter Yu said: “We think one of the key reasons Samsung has managed to take market share from Apple so far is its large-sized screen offerings.

“However, unless Samsung further differentiates itself with flexible OLED [organic light-emitting diode] screens, it may lose some of these high-end customers.”

Samsung will publish its fourth-quarter results later this month, predicted to show that sales have risen 5 per cent to 59 trillion won, again falling short of expectations.

With more consumers turning to superfast mobile broadband connections for their smartphones, network operator EE said yesterday that two million UK customers have signed up for its 4G service, just four months after it passed the one million milestone.

The company, a joint venture between France’s Orange and Deutsche Telekom, said the sign-up rate was the fastest in the world outside South Korea.

Telecoms regulator Ofcom gave EE the green light for its 4G network in August 2012 by using some existing spectrum, while rivals such as O2 and Vodafone had to wait until last year, after they had bought new airwaves in an auction, to launch their rival offerings.

EE chief executive Olaf Swantee, pictured, said: “We’re incredibly proud of being the first UK operator to bring 4G to the UK and, in just over a year, exceeding our target by reaching two million 4G customers across the country.”

Swantee said two-thirds of 4G customers were moving over from Orange or T-Mobile contracts, and the growing use of social media and mobile video saw average data use surge by 70 per cent in 2013. EE plans to invest £275 million in its voice network this year to improve call quality and reliability, he added.