Electronics giant Samsung has warned that it expects to report a sharp fall in quarterly profit and painted a grim outlook amid tough competition and falling chip prices.
The warning from the South Korean company added to concerns about the wider tech sector after Apple shook world markets last week when it said it was set to miss its latest revenue target thanks to a slowdown in China.
Samsung said a “stagnant and fiercely competitive” mobile market had weighed on earnings as marketing spend rose but smartphone sales volumes remained flat.
It was now expecting to report operating profit of 10.8tn Korean won (£7.5bn) for the fourth quarter of 2018 – down 29% on a year earlier and missing analysts’ expectations of 13.2tn won (£9.2bn).
Sales for the period were down more than 10% to 59tn won (£41bn).
Samsung added that it expected earnings to remain subdued in the first quarter of 2019, but to strengthen in the second half of the year.
Samsung is the world leader in smartphones and memory chips and has enjoyed record profits in recent years despite setbacks including the recall of handsets due to reports they were catching fire.
But it faces mounting competition from Chinese rivals such as Huawei producing quality devices at lower prices.
On Tuesday, Amazon eclipsed Microsoft and Apple to become the world’s most valuable listed company.