Samsung Electronics on Tuesday announced it was expecting stronger earnings during the second three months of 2014 as an increase in sales of its smartphones and high-tech televisions spurs on growth. This came after the South Korea based company posted a quarterly profit that fell for the second consecutive time.
The tech giant said the Brazil World Cup in June should help increase sales of smartphones and televisions during the second quarter, as fans decide to splurge on devices such as the televisions that are ultra high definition so they can watch the soccer action.
A revival of smartphone and upmarket TV sales is critical for Samsung to maintain growth, in its mobile business, which generated 75% of its profit during the first quarter, but sustained a loss in the smartphone market for the first time in four years.
However, while the demand related to sports should prove positive, analysts said the high prices and dearth of content for UHD could limit its upside for sales for premium devices from the worldwide football event.
Samsung announced that shipment of handsets for the second quarter would be similar to the period of January through March, which was 113 million. Although, smartphones like the Galaxy S5, should make up more of the shipments from April to June.
Samsung shares were off by 1.7% on the announcement.
The largest technology company in the world by sales said its operating profit dropped 3.3% during the first quarter compared to last year during the same reporting period.
Profit in its mobile division was down by 1.2% from the same period one year earlier.
The largest smartphone maker in the world is currently banking one its top handset the Galaxy S5, launched in early April to outsell its previous generation and widen its profit margins, said a senior Samsung executive.
The conclusion of the smartphone innovation heyday has left the South Korea tech giant facing its first fall in annual profit in the past three years, after posting five consecutive quarterly profits that were record breaking.
The broad range low-end phones of the company have been caught by the offerings from China that have been improved immensely, while the advantage of large screen in its top end smartphones should be threatened with the next generation iPhone by Apple.
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