Samsung’s profit hit bottom in third quarter ahead of slow recovery 

Samsung Electronics Co Ltd’s (005930.KS) profit is seen weakening further in the third-quarter, underscoring the downturn in its market-leading smartphone business and piling pressure on the firm to deliver a revamped product lineup.

According to analysts, the world’s largest smartphone maker, which is due to give its July-September earnings guidance on or around Oct 7, is to show its worst operating profit in nearly three years, with a slow recovery seen starting in the fourth quarter.

“What’s expected now is for the company to hit bottom and gradually recover, but we have now seen smartphone-related earnings peak,” Korea Investment Trust Management fund manager Baik Jae-yer said.

Analysts and investors argue that Samsung’s days of massive smartphone-driven earnings are over, as Apple Inc (AAPL.O) grabs the lion’s share of profits at the high end of the market and Chinese makers of cheap and feature-rich smartphones, like Lenovo Group Ltd (0992.HK) and Xiaomi Inc, erode margins at the low end.

“We used to look at the smartphone market from an Apple vs. Samsung framework, but it turns out that it was really Apple vs. Android,” IBK Securities analyst Lee Seung-woo said, referring to Google Inc’s (GOOGL.O) mobile operating system which powers most smartphones including Samsung’s.

“Samsung used to take all the profits from Android because its rivals were doing such a poor job. Now there’s very little difference between Samsung and its Android rivals,” Lee said.

Source: Reuters- Samsung’s profit hit bottom in third quarter ahead of slow recovery

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