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Business

Samsung profits plummet with sluggish sales

The electronics giant has posted a significant drop in its fourth-quarter net profits. The dismal figure has further called into question the future of the smartphone market, shortly after Apple raised its own concerns.

Samsung Electronics, the world's biggest handset maker, announced Thursday a net profit of $2.7 billion (2.5 billion euro) for the three months from October to December 2015, far below analyst expectations and down 39.7 percent from the same period the year before.

In a statement, Samsung blamed "global economic headwinds, including a sharp fall in oil prices" for its low fourth-quarter earnings.

The company cited sagging demand in the IT and PC markets, which has lowered prices for its chips and LCD panels. Sales of both products were

expected to offset

stricter competition in the smartphone sector.

A surging Korean Wan, the South Korean currency, also negatively impacted its business abroad, Samsung added.

Fourth-quarter sales rose only 1.1 percent compared to the same period in 2014, ticking up to $44.4 billion. Operating profits fared better, up 16.1 percent to amount $5.1 billion.

For 2015 as a whole, Samsung's net profit fell 18.5 percent to $15.8 billion. The company also warned that 2016 was unlikely to be much kinder, "due to a difficult business environment and slowing IT demand."

Smartphone slowdown

The smartphone market has become a trouble spot for Samsung, where it has suffered from overcrowding and slackening demand overall.

Chinese companies Huawei and Xiaomi have come to challenge Samsung with their low-priced handset offerings, while Apple continues to dominate the higher-end of the market.

Samsung's competitor to the iPhone, the Galaxy S6 handset, was met with tepid reaction after its launch last April.

But the market appears to be wearing thin even for the seemingly invincible Apple. Despite reporting record profits on Wednesday, the behemoth announced its slowest-ever growth of iPhone sales last quarter and even predicted its

first-ever decline in sales

in the current quarter.

jtm/sri (AFP, dpa)