As the worldwide smartphone market slows, Samsung's second-quarter earnings showed that it is beginning to feel the pressure despite being the world's top smartphone vendor.
Samsung said its Q2 2013 operating profit increased 47.5% to $8.5 billion, in line with the company's own estimate. Operating profit at its mobile division, which accounts for two-thirds of the company's revenue and is its biggest earnings driver, rose 52% to 6.23 trillion won ($5.6 billion), but fell 3.5% from the previous quarter.
The reporting period included the launch of the Galaxy S4, Samsung's flagship phone and its main rival to the iPhone. One month after the Galaxy S4 s launch, Samsung said it'd hit a record 10 million channel sales, but the Korean tech giant is under the same challenges as Apple thanks to a slowing global smartphone market and shrinking margins. Earlier this week, Apple reported weaker international sales, due in large part to a dramatic revenue plunge in China.
Samsung said that smartphone sales will continue to be slower in the third quarter.
"Entering into a typically strong season for the IT industry, we expect earnings to continue to increase," said Samsung head of investor relations Robert Yi in a statement. "However, we cannot overlook delayed economic recovery in Europe and risks from increased competition for smartphone and other set products."
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