|Samsung Q1 net profit rises
Samsung Electronics reported Tuesday its net profit had risen 5.9 percent year-on-year in the first quarter to 7.57 trillion won but operating profit declined for a second straight quarter on slowing smartphone revenue.
Alarm bells have been sounding for a while over Samsung's reliance on smartphone sales in mature markets such as Europe and the United States, and increasingly competitive emerging markets such as China, AFP reports.
The world's largest smartphone maker has a diverse product line ranging from memory chips to home appliances, but more than half its profits are generated by mobile devices.
This month saw the global roll-out of the latest version of its flagship Galaxy series smartphone, the S5, whose performance will be closely watched over the coming months.
While reviews have rated the S5 a top-class product, they note that it offers little in the way of real innovation that would set it apart from previous versions and models offered by competitors such as Apple.
Samsung made margin concessions with the S5, launching it at a slightly lower price than its predecessor the S4 and throwing in a premium software bundle estimated at more than US$500.
The strategy appeared to have met with some success, as the net profit figure released on Tuesday beat most analyst estimates.
However, operating profit stood at 8.49 trillion won for the January-March period, down 3.3 percent year on year and following a 6.0 percent decline in the fourth quarter.
Overall sales in the first three months of the year inched up 1.53 percent to 53.7 trillion won, but were down 2.5 percent for the mobile business unit.
The firm's Seoul-listed shares were down 1.66 percent in the morning, while the broader KOSPI market was 0.22 percent lower.
Samsung on Tuesday acknowledged it was faced with a tough road ahead as demand would remain sluggish in the second quarter.