Ahead of its official Q4 earnings report, Samsung issued an estimate this morning predicting an operating profit of $7.8 billion for the fiscal quarter ending in December, marking a drop in profits of roughly 18 percent compared to Q3. The South Korean company’s weak quarter could lead to even weaker profits in 2014, with Apple set to break into the Samsung-dominated Chinese market thanks to a deal with China Mobile.
Samsung could also face added competition from Apple if the company releases a larger iPhone, which Cupertino is expected to do with the iPhone 6 launch later this year. Recent reports suggest Apple could unveil a 4.9-inch iPhone as soon as May, though we haven’t seen any concrete proof to support these rumors so far.
We won’t know the specifics of its fiscal quarter until Jan. 24, when we’ll learn how the company’s smartphone business held up; Samsung’s mobile business currently accounts for two thirds of its profits. According to Reuters, the drop in profits is largely due to a massive management bonus doled out this year to mark the 20th anniversary of Samsung’s “New Management” strategy, though it’s possible sales also took a hit.