Samsung Suffers Mobile Phone Sales Decline

Samsung Electronics has reported another quarterly decline in operating profits after sales of its mobile phones slowed.

The South Korean firm made $8bn (£4.7bn) in its first quarter - down more than 3% on the same January to March period last year.

It comes after operating profits fell 6% in the fourth quarter of 2013.

The latest performance was largely blamed on smartphone sales easing back by 2.5% in the period, amid stiff competition from the likes of Apple, which enjoyed a sales resurgence over the same months after its handsets became more widely available in China.

Samsung, which is the world's largest smartphone maker, has a diverse product line ranging from memory chips to home appliances but more than half its profits are generated by mobile devices.

This month saw the global roll-out of the latest version of its flagship Galaxy series smartphone, the S5, the performance of which will be closely watched over the coming months.

While reviews have rated the S5 a top-class product, they note it offers little in the way of real innovation that would set it apart from previous versions and models offered by competitors such as Apple.

Samsung made margin concessions with the S5, launching it at a slightly lower price than its predecessor, the S4, and throwing in a premium software bundle.

The company has admitted it faces a tough road ahead, with mobile demand expected to remain sluggish in the second quarter.

However, it still expects sales of the Galaxy S5 to beat those of the S4.

The company's bottom line was boosted by a 22.8% surge in memory chip sales from the first quarter of 2013.

It helped overall net profits top market estimates at $7.5bn (£4.4bn).

Its Seoul-listed shares were down 1.6% in late trading.

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