Samsung profit growth slows in second quarter from ‘sluggish’ smartphone sales | City A.M.

Mobile phone giant Samsung posted its slowest quarterly profit growth in more than a year today on the back of weak sales on its Galaxy S9 smartphones and tough competition.

The figures

Profit rose by 5.7 per cent to to 14.87 trillion won (£10.12bn) compared with last year, but took a dive from 15.64 trillion won in the first quarter of this year.

Sales fell dropped 58.48 trillion won from 60.56 trillion won in the first quarter and 61 trillion won in the second quarter last year.

It also saw no real boost in net profit due to higher income tax.

Why it’s interesting

Samsung said revenue in the second quarter feel due to “softer” sales of smartphones, particularly the Galaxy S9, and display panels in what it called a “stagnant” and “sluggish” market. It alluded to rivals like Huawei, acknowledging that competitors were offering cheap new smartphone models.

As a result, it said it would “seek to expand sales by introducing a new Galaxy Note earlier than usual, which offers exceptional performance for a reasonable price”.

What Samsung said:

The mobile market condition will likely remain challenging in the second half amid pricing competition and new product launches. The Company will respond through the early introduction of the Galaxy Note and competitive mid- and low-end models with new features. Earnings from the TV business will continue to improve as Samsung expands sales of new innovative premium models including QLED and 8K TVs.

Over the mid- and long-term, Samsung expects new opportunities in the component business from the ongoing transformation in the industry, led by the Internet of Things (IoT), artificial intelligence (AI) and 5G technologies. The set businesses will also benefit from the introduction of new form factors and innovative technologies to support growing demand for connected devices.