Published: Wed, August 01, 2018
Industry | By Dora Warner

Samsung Q2 profit dented by low S9 sales

Samsung Q2 profit dented by low S9 sales

Data released by market tracker Counterpoint Research in July showed Samsung's latest Galaxy 9 Plus premium handset had been overtaken by Apple's iPhone 8 as the world's top-selling smartphone.

At the same time, thanks to some less-than-great Samsung Galaxy S9 sales numbers, Samsung suggested two things were true. The smartphone, which was released at the end of last quarter, accounts for a major chunk of Samsung's 4 percent year on year drop in revenue. Samsung reported a revenue of 58.4 trillion won ($52.1 billion) for the period, and operating profit of 14.87 trillion won ($13.3 billion), which is up 6%. To offset slowdowns in mobile, the company has touted its growing sales of chips, which it manufacturers for itself and other smartphone makers, including Apple.

Like other big electronics firms, Samsung faces challenges from the US-China trade war, falling prices of some memory chips and the rise of cheap Chinese-made handsets. In addition a sooner-than-expected launch date for its next generation Galaxy Note model, Samsung will work towards more competitive pricing and quicker adoption of future technology overall, throughout all of its lines of product.

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The mobile business booked a 34 percent fall to 2.7 trillion won in quarterly operating profit, its biggest decline since the Galaxy S7 was its flagship model early past year.

"Second quarter revenue fell due to softer sales of smartphones and display panels", Samsung said in a statement.

Samsung is pinning its hopes on foldable phones to become the next big thing.

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Despite its difficulties in the mobile sector, the company is expected to post record profits in the next quarter thanks to its semiconductor division, analysts told AFP.

Weak sales of its flagship smartphone, the Galaxy S9, drove down earnings but robust demand for premium TVs - thanks to soaring interest in the World Cup - and memory chips helped boost operating profit almost six%. Prices for 128 gigabit MLC NAND flash memory chips fell about 9 percent, according to inSpectrum Tech Inc.

Disappointment over the latest figures was reflected in Tuesday's trade, with Samsung Electronics shares closing down 0.5% at 46,250 won. The consumer rebuke, plus heavier marketing expenses, caused second-quarter mobile-unit profits to nosedive by one-third from a year earlier. High demand from datacentres secured the profit, the company said.

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