Samsung Elec's smartphone primacy under threat from Apple after weak Q4

Thu Jan 29, 2015 3:05am EST
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By Se Young Lee

SEOUL (Reuters) - Samsung Electronics Co Ltd (005930.KS: Quote) is closer to losing its crown as global smartphone leader after posting a plunge in quarterly mobile earnings on Thursday, a day after rival Apple Inc (AAPL.O: Quote) reported the biggest profit in corporate history.

The South Korean giant said earnings from smartphones and other mobile gadgets dropped 64 percent annually in the October-December period to 1.96 trillion won ($1.80 billion), contributing to its first annual earnings fall in three years.

It was the mobile division's fifth consecutive quarter of decline, in contrast to Apple's record-breaking 74.5 million iPhone sales in the three months to Dec 27 on the back of the success of its big-screen iPhone 6 and 6 Plus. [ID:nL4N0V65HN]

Analysts say Samsung is under immense pressure to hang on to its market share, with a lot resting on the launch of its next flagship Galaxy S6 high-end smartphone due around March.

"I think after learning a hard lesson, we'll see a significant improvement in terms of design, build quality and on the specs ... The question right now is whether this is enough," Maybank Kim Eng analyst Warran Lau said.

While Samsung did not release smartphone sales figures, it said smartphone and tablet shipments declined in the fourth quarter, leading some analysts to declare Apple had caught up.

"Apple's new iPhone 6 and 6 Plus models are proving wildly popular in China, United States and Europe. Apple tied with Samsung to become the world's largest smartphone vendor for the first time since Q4 2011," Strategy Analytics Executive Director Neil Mawston said in a statement.

Research firm Counterpoint said in a separate report on Thursday that Apple overtook Samsung as the top smartphone maker during the fourth quarter.   Continued...

A man walks at the Samsung Electronics' headquarters in Seoul January 7, 2015. REUTERS/Kim Hong-Ji