Samsung Electronics announced profit results above analyst expectations Friday but also predicted a decline in earnings for the current quarter, which pushed the stock lower by 2 per cent overnight. The company noted an increasingly competitive smartphone market – one which may leave little opportunity for Research in Motion's new Blackberry 10 device.
South Korea-based Samsung announced a 76-per-cent year over year improvement in quarterly profit to 7.04 trillion won ($6.6-billion). But at the same time, management made comments on the smartphone market that will send a chill up the spines of RIM management and shareholders.
"There's concern for a high-end smartphone demand growth slowdown as penetration goes up," noted Han-Joong Kim, the head of the company's Mobile Communications Business, who also admitted "various challenges to sustain our business performance as competition in the industry becomes even more fierce."
Bullish observers of the smartphone sector will point to the 20-per-cent growth rate expected in 2013. But the majority of this growth is expected in China, where the leading brands are sold for prices as low as $100 (U.S.), a market in which Apple and RIM do not compete.
Research in Motion will be releasing the high-end BB10 directly into the teeth of intense competition from globally dominant electronics firms with a far better recent history of designing and building devices that consumers actually want. The slowdown in smartphone sales growth for both Apple and Samsung suggest that if the BB10 is going to save RIM, it must not only be good, it must be perfect.