Samsung's Net Profit Slumps 40 percent

Samsung Electronics posted a near 40 percent fall in first quarter net profit on Wednesday April 29. This was the company's fourth straight quarterly decline.

The world's top handset maker reported a net profit of 4.6 trillion won ($4.3 billion) for the January-March period. This is down 38.9 percent from a year earlier.

According to CNBC, Tom Kang, the research director at Counterpoint Research said that the reports reflects Samsung's smartphone strategy had reached it's limit. Kang said that it was "not working" anymore.

But in a sign that the electronics giants might be turning a corner, the operating profit was up 13.1 percent from the fourth quarter of last year.

"In 2015, continued growth is expected due to the growth of emerging smartphone markets such as China and India as well as the global expansion of the LTE business." Samsung said in a statement, according to Cnet.com. The statement also said that the dip was due to increased challenges in the "middle to low-end" mobile market.

Reuters report that Samsung Vice President Park Jin-young said the Galaxy S6 sales have been doing as well as expected. He also added that the demand for the Galaxy S6 edge have been better than anticipated. The two devices feature more premium, metal casings instead of the normal plastic casing found in other Samsung phones.The Edge also includes a screen that curves around the sides of the device. Samsung has also opted to use its own processors in the devices instead of purchasing chips from suppliers, which could mean in benefiting its financial results in the coming months.

Pre-orders for the smartphones started on March 20, and they hit the market earlier this month. Samsung has predicted record sales for Galaxy S6 devices and says it's selling the phones faster than it came make them. Analysts believe as many as 3 million units were shipped before the first quarter ended in March, according to Forbes.

Despite the signs of recovery, the firm's latest earnings still stood in stark contrast to Apple's, which this week reported a 33 percent surge in net profit to $13.6 billion in the first quarter. Apple's rise is because of the record breaking sales of the iPhone 6, especially in the Chinese market.

Samsung has been struggling to compete against Apple in the high-end phone market and against newcomers such as Xiaomi at the low end. Apple in particular has become a bigger threat with its larger-screen devices, the 4.7-inch iPhone 6 and the 5.5-inch iPhone 6 Plus.

As Samsung's mobile business struggles, investors have increasingly turned their attention to the company's processor business. Samsung is the world's biggest maker of memory chips and also manufactures application processors for many devices, including many of Apple's iPhones.

To report problems or leave feedback on this article, email: sasonian19@gmail.com.