Friday, 20 July, 2018


Samsung's profit declines after 7 straight quarters of growth

Image Source ITHome Image Source ITHome
Melba Vasquez | 06 July, 2018, 17:43

The Samsung Galaxy S7 has reportedly been the company's most-popular smartphone today, having sold around 50 million units.

Operating profit for the three-month period is expected to come in at 14.8 trillion won ($13 billion) from 58 trillion won (£39bn) in revenues.

While the smartphone business struggles, Samsung's profits are being driven by strong global sales of DRAM and NAND chips which account for about a third of its revenue.

Smartphone sales started to cool previous year after a decade of robust growth, but Samsung had managed to weather the slowdown, thanks to demand for memory. The Galaxy X will likely not cannibalize sales for the Galaxy S10, as the foldable smartphone is expected to be a niche device with a price tag that may go as high as around $1,800, almost double the price of the $1,000 iPhone X by rival Apple.

Samsung was also hurt by a fall in prices for its liquid crystal display panels, which are used in both TVs and smart devices.

Samsung warned in April that its mobile business would see "stagnant sales of flagship models amid weak demand and an increase in marketing expenses" in the second quarter.

"While chip sales keep rising, smartphones aren't looking good", said Jung Sang-jin, a fund manager at Korea Investment Management.

Samsung, which has reported record profits for every quarter in the past 12 months, on Friday released its earnings guidance for the second quarter of 2018.

Competition from cheaper Chinese brands like Xiaomi Corp (1810.HK) and Huawei have already seen Samsung lose market share in China and India, the world's top smartphone markets. However, it looks like the company might be changing a key element of the device.

The won may also help Samsung to bounce back in the second half.

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