It's not much of a secret that Patently Apple isn't a big fan of Samsung and a quick search on our site will prove that out. We've been pounding the table about Samsung's silly volume strategy that both Wall Street and the mainstream press had been applauding so loudly up until a few weeks ago when the tide began to turn. As early as February we reported that Apple had grabbed 70% of the Global smartphone profits for Q4 2012 despite the mainstream press touting that Samsung was the true market leader – based on volume. So yes, it's music to our ears to hear that the "Volume Leader" is falling short on sales and profits.

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According to Reuters, "The disappointing earnings estimate by Samsung, which has had a track record of beating even the most bullish forecasts, sent its shares down more than 3 percent on Friday. They have dropped 17 percent since early June, hit by a series of brokerage downgrades. The share price reflects concerns about Samsung's handset margins…"

The Reuters report added that "The guidance, released ahead of full quarterly results due on July 26, was worse than an average forecast of 10.16 trillion won in a poll of 43 analysts by Thomson Reuters I/B/E/S."

The BBC reported that "The slowdown in its handset business appears to be worse than expected and the disappointing result simply reinforces the market view that Samsung's smartphone growth momentum is slowing," said Lee Sei-chul, an analyst at Seoul-based Meritz Securities.

The Wall Street Journal Reported that "More downward revisions are likely from brokerages," with the operating profit now estimated to fall below market consensus of 10 trillion won, said Jae H. Lee, an analyst with Daiwa Securities. "Higher marketing costs likely pressured the operating profit," a burden which will likely increase in the second half as the company tries to keep sales volumes up, he added." Yes, the old sales volume mirage.

Bloomberg Businessweek quoted Byun Han Joon, a Seoul-based analyst at KB Investment & Securities Co as saying that Samsung "sharply missed the market expectation, and that worries me. The market was initially concerned about the third- and fourth-quarter results, but today's news raises questions if the earnings are already in bad shape."

Samsung's massive profits miss appears to prove out that the old sales-volume trick without profits can only work for so long and that we've been calling it right for months – well ahead of today's news. Samsung, the plastic leader, admitted to being a fast follower lately and today we see that this notion that they're a true smartphone innovator isn't panning out as they've planned. Technology leadership is more than just sales volume and Samsung is hearing that music loud and clear from Wall Street today.

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