Sales of Samsung Galaxy smartphones slowed in the first quarter, as consumers held off on buying existing models in anticipation of the now-available Galaxy S5 flagship phone.
The South Korean phone-maker announced sales of its handsets slid by 4% during the period between January and the end of March. Revenues for its mobile division dropped to £23.3 billion.
However despite the downturn, profits rose to £4.4 billion from £4.2 billion in the preceding quarter. That’s more impressive than it might appear given that sales of the Galaxy S4 would have tapered ahead of the launch of a newer model.
Early indications suggest that the Galaxy S5’s sales have been broadly in line with its predecessor, if not a little bit better.
That would appear to endorse Samsung’s decision to market the S5 as a “back to basics” phone that dispensed with the Galaxy S4’s suite of flashy, but little-used features. Or at least secreted them away where they didn’t get in the way.
However, conditions are likely to worsen for the tech giant as the year continues, amid narrowing margins in the smartphone business and increased competition from Asian rivals offering comparable handsets at a budget price points.
Reuters states: “Samsung's mobile business is poised for an uncertain 2014, analysts say.
“Its broad range of low-end phones are being caught by the improving quality of Chinese-made offerings, while the large-screen advantage of its top-range phones could be countered by new models from Apple Inc."
Samsung did not break down figures for handsets, but it’s thought that its lower-cost Galaxy efforts compensated for weakening demand for its higher-end smartphones.