Samsung Hits New Record Amid Smartphone Fears

Samsung Debuts Its New Flagship Smartphone, The Galaxy S IV
Samsung has reported another record quarterly profit, amid fears over flagging demand for expensive smartphones.
The South Korean tech giant, the world's largest technology firm by revenue, said its April-June profit after tax surged 49.7% year-on-year to 7.77 trillion won (£4.49bn).
The profit rise is based on robust shipments of its flagship Galaxy S smartphones and higher chip prices.
Second-quarter operating profit surged 47.5% on-year to 9.53 trn won (£5.56bn) in the same period as sales grew 20.7% on-year to 57.46 trn won (£33.56bn).
"Entering into a typically strong season for the IT industry, we expect earnings to continue to increase," Robert Yi, senior vice president, said.
But he warned: "We cannot overlook delayed economic recovery in Europe and risks from increased competition for smartphone and other set products."
However, Samsung's share price has been falling - wiping about £20bn off the firm's value - since late April when the flagship Galaxy S4 hit stores, as sales have not been as high as hoped.
That is despite the company spending billions on a global marketing campaign that has squeezed margins.
Samsung's share price fell 0.91% on Friday at the close in Seoul.
"Expectations had been too high for high-end smartphone sales. Many investors now think the Galaxy S4 has not been selling so well," Oh Young-Bo, of Hanmag Securities, said.
He added that investors are growing concerned as Samsung relies heavily on sales of smartphones to drive growth.
With an expected drop-off in demand for high-end phones, analysts began cutting their forecasts for profit and sales in June.
Samsung did not reveal smartphone shipments but it is thought to have sold about 75 million in the past quarter, some 760,000 a day, including around 20 million Galaxy S4s.
But while that helped Samsung maintain its status as the world's largest handset maker, the figure is only slightly up from the estimated 70 million shifted in the previous three months.
The easing of shipped units has suggested a slowdown in growth momentum.
That compares with Apple, which sold 31.2 million iPhones in April-June  - a record for the quarter - compared with 37.4 million in the previous three months, according to research firm Strategy Analytics.
However, Apple's fiscal third-quarter results on Tuesday showed net profit plunged 22% year-on-year.
And while iPhone sales beat expectations, there are still fears for the high-end smartphone market as cheaper Android devices from China and emerging markets become more attractive options.
Samsung, Nokia Corp and HTC Corp are launching more affordable devices to diversify their product line-ups, although analysts have warned that such a move could hit their profit margins in the longer term.
ABI Research said Apple's global smartphone share was down to 13.1% from 16.6% a year ago - its lowest level since Q3 2009 - despite the market growing 52% in the same period.