Samsung Electronics has posted its sixth straight quarterly decline in profits as its competition in its key smartphone and display businesses heats up.
The tech giant reported that its income from January to March amounted to 4.63 trillion won ($ 4.35 billion), down by 39 percent from the 7.49 trillion won it posted last year, according to Yahoo Finance.
Sales dropped by 12 percent from last year, amounting to 47.12 trillion won, while operating income fell by 30 percent to 5.98 trillion won.
This drop in profits was attributed to the big plunge in profits in Samsung's mobile business. The company said that its mobile division earned 2.74 trillion won in quarterly profit, significantly lower than the 6.43 trillion won it earned the year before.
Analysts estimate that while Samsung sold more smartphone units than competitor Apple, the Korean company lost its share in the high-end market to the U.S. firm after the latter released the iPhone 6 and 6 Plus. Forbes reported that Apple is doing well against Samsung in China, with it's global market share in shipments jumping in the first quarter from 11 percent to 14 percent.
Samsung does not disclose its smartphone shipments, but analysts estimate that the company sold around 81 million smartphones during the first quarter. However, most of these units are Samsung's mid-level handsets like the Galaxy A series, which are cheap compared to its flagship models.
Samsung expects that profits will increase during the second quarter of the year with the release of the Galaxy S6 and S6 Edge, but analysts say that shipments of these high-end models are still not big enough to offset the diminished sales of the low and mid-end models. The company will also have to take into account its marketing expenses, which will go up, adding more pressure to its profit margin.
On the other hand, Samsung's component division's profit improved during the first three months of this year. This division is responsible for supplying chips and displays for smartphone and TV manufacturers, including Apple. However, Samsung's consumer electronics division, which manufactures TV sets, lost 140 billion won in the same quarter.
