Samsung has just published their Q4 2013 financial results. There aren’t really any surprises here since the company issued estimates several weeks ago that were pretty much spot on. Revenues hit a record 59.28 trillion Korea won, but profits fell 18% quarter on quarter to roughly $7.7 billion. Why the drop? Samsung says the phone division is doing great, and the tablet division saw sales double. It’s Korea’s currency that’s to blame, along with a one-time bonus to celebrate the company’s 20-year anniversary of their new management structure. Oh and apparently they made a bit too many televisions as well.

How should you interpret these results? Let’s focus on the mobile part of Samsung’s business. Revenues dropped 9% sequentially to roughly $31.5 billion. Profits dropped 18% sequentially to $5 billion. Translation: During what’s supposed to be a company’s best quarter, Samsung not only sold fewer phones, but made less money on the phones they did sell. That’s bad.

Why is this happening? When you look at saturated Western markets, it’s clear that people aren’t buying high end phones as much as often as they once did. And then if you look at the East, local players are making amazing devices at ridiculous price points that Samsung can’t touch because it would cut into their margins.

The situation you’re seeing right now is exactly what happened to Nokia back in 2007. They were once the King, but then Apple came and took the high end, Chinese players took the low end, and that saw Nokia spiral out of control into a pit of failure.

Samsung is far from failing, but the question should be asked: Have they peaked?