Samsung profit forecast disappoints as it looks forward to wearable devices

Mobile phone and television maker Samsung Electronics has forecast weaker than expected profits for the three months to June, leading to further worries its smartphone business may have reached its peak.

Analyst expectations of a 10.1tn won were already modest, but Samsung’s estimate of 9.5tn won may be a cause for concern. A slowdown in Samsung’s smartphone sales has been feared as rivals develop new, innovative products at low prices. It would be a big blow for the company, with around 70 per cent of its total operating profit deriving from its mobile business. It is worth noting that a 9.5tn won operating profit would be 47 per cent higher than one year ago and at a record high.

Any slowdown in Samsung could have a knock-on effect on Android, with Samsung accounting for nearly 95 per cent of Android’s smartphone sector profits.

Disappointing sales of the heavily marketed Galaxy S4 is thought to be behind the lower profit forecast. Samsung’s major upcoming innovation is its wearable phone along the lines of Apple’s iWatch. Samsung has recently filed a trademark for "Samsung Gear" in the US for a range of wearable devices, and it's thought this could be the name of its new phone.