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Tuesday, 07 January 2014 12:30

Samsung braces for bad year

Written by Nick Farrell



But it is nothing to do with Apple

Samsung is preparing for its weakest smartphone profit growth this year. The Tame Apple Press claims, against all evidence that this is because Jobs’ Mob is going to take control of the Chinese market. This is pants as Apple is vying for the expensive end of the Chinese market which is tiny. Besides, Samsung is a lot more popular in China after Apple’s anti-consumer antics were outted by a government watchdog.

 

However saner heads suggest that it is more likely that Samsung’s woes are nothing to do with Apple getting a contract to sell though one of Chinas biggest phone operators. The real fact is that Samung is suffering from the The won's rise to a five-year high against the US dollar. This is because the value of Samsung's earnings are cut. A strong won is particularly troublesome for Samsung's components business, which generates around 30 percent of overall operating profit, because it primarily settles accounts in dollars, analysts said.

Samsung's brightest spot is its semiconductor unit, which brings in 20 percent of operating profit, and which enjoys growth estimates of around 42 percent this year. Overall operating profit growth for 2014 is likely to be 6.2 percent, the slowest pace in three years, according to Starmine.

Operating profit at Samsung's mobile devices division is likely to grow by a low single digit or to shrink mildly in 2014, after increasing in size by eight times over the past five years, according to a Thomson Reuters' Starmine SmartEstimate of 23 analysts.

Last modified on Tuesday, 07 January 2014 12:36

Nick Farrell

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