Growth in demand for high-end smartphones slows: report

Shipments of high-end smartphones are likely to suffer a slowdown in the coming years, denting the world's two biggest smartphone makers -- Samsung Electronics Co. and Apple Inc., a report showed on Wednesday.

According to the report by Hi Investment & Securities, shipments of high-end smartphones are expected to reach 380 million this year, growing 12 percent from a year earlier.

But this year's growth marked a sharp slowdown from last year's 26-percent on-year expansion, the 59-percent rise in 2011 and the 89-percent gain in 2010, the report said.

The comparable figure for next year was estimated at 5 percent, it said.

A high-end smartphone typically has a high-resolution screen display, Internet connectivity through either WiFi or long-term evolution (LTE) and sophisticated applications.

Analysts said the slowdown in the growth of high-end smartphones will hurt the profitability of Samsung and Apple, which focus on selling high-end mobile devices.

According to the report, high-end smartphones priced at US$300 or above accounted for 97 percent of Apple's smartphones sales in the first quarter of the year, while the comparable figure for Samsung was 42 percent.

"Demand for mid- and low-end smartphones will continue to rise, which eat into high-end smartphone manufacturers," said Song Eun-jung, an analyst at Hi Investment & Securities.

Last week, Samsung projected lower-than-expected operating profits for the second quarter, with analysts citing slower shipments of the flagship Galaxy S4 cited as one of the reasons.

Samsung Electronics, the world's top maker of smartphones, estimated it had posted a record quarterly operating profit of 9.5 trillion won (US$8.36 billion) in the April-June period, a 47 percent increase from a revised operating profit of 6.46 trillion won a year earlier.

But the second-quarter earnings guidance was lower than the market estimate of 10.2 trillion won.

Shipments of low-end and low-priced smartphones, meanwhile, are expected to reach some 582 million this year, compared with 360 million last year, the report said.

The growth of low-end smartphones has been accelerating, reaching 63 percent last year and 70 percent in 2011. The comparable figure for such smartphones next year was put at 40 percent, according to the report. (Yonhap News)