DHAKA: Samsung Electronics reported a drop in fourth-quarter operating profit, as the company increased marketing in an attempt to fight off growing competition in the smartphone and tablet market. While revenues increased to KRW 59.28 trillion from KRW 56.06 trillion a year earlier, operating profit dropped to KRW 8.31 trillion from KRW 8.84 trillion. Net profit still improved slightly, to KRW 7.30 trillion from KRW 7.04 trillion a year ago.

At the IT & Mobile division, quarterly revenues rose to KRW 33.89 trillion from KRW 30.71 trillion in the year-earlier period, while operating profit was flat year-on-year and down 18 percent from Q3, to KRW 5.47 trillion. Samsung said smartphone demand increased worldwide due to the holiday season, and tablet demand was much stronger due to a wide range of promotions. However, the company`s own smartphone shipments were "slightly" lower on a sequential basis, which Samsung attributed to year-end inventory adjustments and a strong Q3. Samsung tablet shipments were up sharply from the previous quarter, driven by strong sales of the new Galaxy Tab 3 and Note 10, the company said.

For 2014, Samsung expects competition to intensify in the feature phone market, as the migration to smartphones accelerates. The smartphone market will be driven by the transition to LTE in Europe and China and demand from emerging markets, and the company plans new mid-range and high-end products to target these areas. Rapid growth is also expected to continue in the tablet market, although Samsung expects both phones and tablets to be weaker in Q1 due to the usual seasonal slowdown.  

At the company`s other activities, Samsung said semiconductor demand was led by the game console, server and tablet markets. High-end mobile components were weaker than expected, and the company is looking to add new customers and products here, including 20nm production, in order to improve results. In the display market, over-supply continues to drag on prices, but the company expects a better balance in 2014, when demand should improve thanks to the launch of more UHD TV products, greater OLED adoption and global sporting events.  

Source: telecompaper
BDST: 1750 HRS, JAN 24, 2014