New iPhone sales cause Samsung profits to drop

Samsung, the world’s biggest maker of smartphones, posted its slowest profit growth since 2011 as new Appl iPhones lured high-end customers and gains in the Korean won curbed the value of overseas sales. Net income, excluding minority interests, rose 5.4 percent to 7.22 trillion won ($6.7 billion) in the three months ended Dec. 31, the Suwon, South Korea-based company said in a filing today. That’s the slowest since profit fell in the third quarter of 2011.

Profits were flat in the fourth quarter in Samsung Electronics’ smartphone and tablet business, despite an uptick in sales, in part because the company spent more on marketing over the holiday shopping period. The company’s IT and mobile communications (IM) division, which has smartphones and tablets as a key component, posted in the quarter the same operating profit of 5.47 trillion Korean won (US$5 billion) as in the fourth quarter of 2012, even as revenue from its mobile business grew 8.7 percent to over 32 trillion won. The largest smartphone maker said earnings of its mobile business took a hit because of seasonally increased marketing expenditures and an unspecified one-off expense.