The South Korean company said today that it saw better business conditions in the third quarter, but it faces slowing market growth, intensifying price competition at the lower end and the looming threat of Apple’s next iPhone.
While smartphones drove Samsung to record profits last year the market is maturing, with research firm IDC predicting global shipments growth will slow to 19.3 per cent this year from 39.2 per cent in 2013, while average sales prices will also drop.
Despite the potential damage to its margins, some analysts said Samsung may have no choice but to slash prices for mid-to-low tier devices, where growth is stronger, to go after cheaper Chinese rivals such as Huawei Technologies and Lenovo Group in an effort to defend its market share.
"The earnings deliver a harsh reality check to Samsung that it is not Apple, but Samsung. Its strategy of selling phones at expensive prices will not work anymore, as Chinese...