Is the global tech industry in for a tough year? Samsung's Q4 operating profits are likely to be lower than expected - raising red flags for a sector which also includes Apple, and its suppliers. Grace Pascoe reports.
Is the tech sector stuttering? South Korean Samsung's outlook suggests yes. Its fourth quarter operating profit, it says, likely to rise 15 percent from a year earlier. Missing expectations and fuelling concerns on falling gadget sales. Vicky Pryce of CEBR says China's slowdown is having a big influence. (SOUNDBITE) (English) CEBR, CHIEF ECONOMIC ADVISER, VICKY PRYCE, SAYING: "They were buying lots and lots of smartphones. Of course, there is competition from Chinese production as well... There could be individual issues in terms of the supply chain that Samsung is involved in that is affecting it. But overall then, yes, there may be an oversupply of some gadgets right now and I think the industry needs to take stock of that and look ahead." Weaker emerging market currencies also having an impact. Undercutting sales of consumer electronics and gadget components. Prior to the guidance, shares of the world's No.1 maker of memory chips and smartphones were at a three-month low. As investors braced for downside risks. But its shares were buoyed 1.8 percent on the guidance - some investors saying Samsung had done well under the circumstances.