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Samsung Says Phone Business Is Tough and Likely to Remain So

The company's smartphone market share dropped seven percentage points from a year ago, as both sales and profits saw double-digit declines.

The big takeaway from Samsung’s just-released earnings report is that the mobile business is tough, even for the company that dominates it.

Samsung may have passed up Apple in market share, but the company is nowhere close in other areas, including profit margins.

The company saw second-quarter mobile sales drop 12 percent, but profit in the business that includes phones and tablets fell 31 percent amid stiff competition. The company had already warned earlier this month that the second quarter would be a tough one.

Samsung’s global smartphone market share dropped seven percentage points from a year ago, according to IDC.

Looking ahead, Samsung said that the smartphone business will grow in the seasonally stronger second half of the year, but that it expects more competition in the low-end and mid-range of the business, especially in emerging markets. Tablets, too, are expected to see strong competition on price, but the company said it expects fourth-quarter sales to see “substantial growth” thanks to heavy promotion.

Samsung is expected to introduce a new Galaxy Note phablet, but archrival Apple is believed to be readying two new iPhone models, one of which is expected to sport a 5.5-inch screen, making it a more direct rival to the Galaxy Note line.

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