Samsung heads downmarket as profits expected to slide for second successive quarter

Reuters is reporting that a decline in Samsung’s high-end handset sales means that the company is expected to report its second successive quarter of declining profits.

Samsung is likely to estimate a 3 percent year-on-year decline in January-March operating profit to 8.5 trillion won ($8.1 billion) on Tuesday, according to a mean consensus of 40 analysts polled by Thomson Reuters I/B/E/S […]

This would mark the second consecutive quarter of decline – the first negative streak since a four-quarter slip in 2010-2011 – and analysts polled by Reuters expect the trend to continue through the July-September period …

While the company will be hoping that sales of its new Galaxy S5 will boost its fortunes when it goes on sale later this month, analysts say that Samsung is focusing more on lower-end handsets and cost-cutting, which includes reduced spend on advertising and marketing.

Last year, Samsung’s flagship Galaxy and Note products accounted for around 75 percent of its total profits from mobile products; this year, the number is expected to have fallen to just 59 percent. Korea Investment and Securities analyst Seo Won-seok said that Samsung was “likely to focus more on cheaper models,” a statement confirmed by the company’s joint CEO.

JK Shin, co-chief executive and head of Samsung’s mobile business, has called it a “back-to-basics” strategy that will help the world’s biggest technology company by revenue rein in component costs and make products of wider appeal.

It’s recently been reported that Samsung has lost five high-ranking execs in the last two months,