Samsung sees tough outlook, first quarter hits two-year low on TVs

Samsung Electronics faces a challenging outlook after reporting its third consecutive fall in quarterly profit as it stuggles to make ground on Apple Inc and deal with a tepid recovery in its TV and flat screens business. The world's No.2 handset maker, however, said its mainstay memory chip business was rebounding after Japan's devastating earthquake and tsunami in March hobbled production from rivals including Toshiba Corp.
"Although the memory chip business is reviving, other operations such as telecommunications and displays are facing tough times ahead," said Han Se-woong, a fund manager at AssetPlus Investment Management, which owns Samsung shares. "Its race with Apple seems pretty difficult and income in its display division is in a slump." Samsung's Galaxy model smartphones and tablet computers were seen among the biggest potential rivals to Apple's iPhone and iPad but it has been unable to match the US company's roaring sales growth.
Sony plans to soon join the fray with the launch of its first tablets in a market set to quadruple in four years. Samsung is also the world's largest top maker of memory chips, flat screens and televisions. Shares in the company, whose $136 billion market value is bigger than Sony , Nokia , Toshiba Corp and Panasonic Corp combined, ended 0.8 percent lower in a broader market down 0.7 percent.
After hitting life-time highs in late January, Samsung shares have lost 12 percent, as analysts lower expectations for its telecoms division, which includes smartphones and tablets. Samsung reported a 2.95 trillion won ($2.75 billion) operating profit for January-March compared to the consensus forecast for a 3.1 trillion won profit by Thomson Reuters I/B/E/S. That was in line with Samsung's estimate for an operating profit of between 2.7 trillion won and 3.1 trillion won.
Samsung, which had negligible share of the smartphone market until early last year, has muscled in with its Galaxy models. It has since sold 14 million Galaxy S smartphones and launched the Galaxy Tab tablet in three different sizes. This week, it rolled out a new version of its flagship Galaxy S smartphone in Korea and expects the model to sell more than 10 million units as the product makes a global debut from May through 140 carriers in 120 countries.
SK Telecom , South Korea's top mobile carrier, said on Friday it had received 160,000 preorders for the new Galaxy smartphone since it started taking orders on Monday and expects 60,000 customers will get the phone on Friday and Saturday when it launches service.
Apple is seeking to keep Samsung at bay with lawsuits claiming Samsung's Galaxy line of phones and tablets "slavishly" copy the iPhone and iPad. Samsung has countersued and on Wednesday, it broadened a patent dispute against Apple by filing a lawsuit in federal court in California arguing that Apple's iPhone, iPod and iPad had infringed 10 mobile technology patents. Samsung made similar claims in Korea, Japan and Germany last week.
Samsung sold around 70 million handsets in the first quarter including tablets. It did not give breakdowns and analysts estimate it sold around 1 million tablets. Apple sold 4.7 million units of its iPad last quarter. Soaring demand for tablets and smartphones is likely to fuel further growth at its semiconductor business, as Samsung counts Apple as its biggest client. Prices of computer memory chips have rebounded since last month's earthquake in Japan.