Samsung’s Q4 Net Profit Drops as Demand is Sluggish for smartphones

Samsung’s Q4 Net Profit Drops as Demand is Sluggish for smartphonesAlthough Samsung's fourth quarter revenue moved up one percent but weak mobile phone and display panel demand did not give the company a big push and that is not expected to alter much in the year.

On Thursday, Samsung announced in Seoul that its Q4 revenue was US $45.5 billion. The company's net profit dropped forty percent.

One day ago even Apple said it expected a weak demand for handsets. The Cupertino, California based company reported that sale of iPhones remained somewhat flat and also forecasted its very first drop in quarterly revenue since 2003.

Samsung is also not expecting anything better and sees a difficult environment this year with slump in IT demand too. Kim SangHyo, Samsung's vice president of investor relations said "It would be a challenge to maintain 2016 operating profit levels."

Samsung saw a drop in revenue in its mobile division which dropped ten percent in the Q4. An earlier unsold inventory of phones with the retailers along with the fact that the company sold less number of high-end phones and greater number of low priced devices also added to the drop in revenue.

Samsung says it expects mobile business growth to see a single-digit growth this year as demand remains low for new smartphones as well as tablet PCs.