Samsung expects its smartphone shipments to fall by as much as 12 per cent next year and plans to reduce output to between 420 million and 430 million units.

A company representative said the reduction was a reaction to the changing market environment, the Korea Times reported. Smartphone growth slowed to 10 per cent annually in Q3 which, according to Strategy Analytics, was the industry’s slowest growth since the “depths of the global economic recession” back in 2009.

Samsung’s smartphone shipments rose 6 per cent last quarter, returning to positive growth for the first time in over a year. The company is the smartphone market leader with a 23.7 per cent global market share.

The source said next year the company will focus on budget handsets, with brisk demand in emerging markets. Demand for its mid-range A series and low-end J series has surprised analysts, the newspaper said.

However, Samsung also plans to release its new flagship high-end Galaxy S7 early next year, at Mobile World Congress in February.

The company last month replaced the head of its struggling mobile business, Shin Jong-kyun, with a seasoned R&D executive. It named Koh Dong-jin, EVP of mobile R&D, as president of the mobile communications business, which has seen a recent improvement in sales. But profitability declined sequentially in Q3 due to a “price adjustment” related to its flagship Galaxy S6 line and change in product mix. It declined 13 per cent quarter-on-quarter.