Samsung Electronics Sees Slowdown in Profit Growth

Galaxy A

The company's semiconductor business achieved record operating profits of 11.6 trillion won, however, results missed analysts forecasts for 12 trillion won.

Both NAND and DRAM sales remained high owing to robust growth in demand on the back of the trend toward higher density for smartphones, SSD for servers and expansion of data center infrastructure. It can also be used to navigate, translate and organize notes through Samsung Notes, and even send personalized texts through Samsung Live Message.

According to IDC, Samsung shipped 71.5 million shipments for the second quarter of this year, becoming the biggest smartphone brand for this quarter.

Looking ahead, Samsung expects sustained strength in the memory market and growing demand for flexible OLED panels to drive earnings higher in the second half.

"Earnings from LCD also declined from the previous quarter as the shipment and average panel price continued the downward trend", it added.

The Apple Inc components supplier and smartphone rival said operating profit from the mobile business sank 34 percent from a year ago, its fastest rate of decline since the first quarter of 2017, as cheaper Chinese-made handsets put pressure on margins.

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"Earnings in the mobile business slid considerably year-over-year as well as [quarter-on-quarter] due to weak sales of Galaxy S9 amid a stagnant high-end market", Samsung senior vice president of investor relations Robert Yi said during the July 30 earnings call. The company also claimed that intensified global competition affected its performance.

Samsung Electronics has revealed that the Galaxy S9 is not selling well, despite the company's efforts of making the phone company's most capable and polished smartphone to date. The phone was launched in 2016 and almost around fifty million units were shipped. The Galaxy On8 takes on the Xiaomi Redmi Note 5 Pro, Honor 9N and Asus Zenfone Max Pro M1 smartphones in India.

The company said the new Note smartphone, which has often been the most expensive phone model from Samsung, will be sold for "a reasonable price" this time. The competition is now having effect on the Samsung's earnings of Q2 2018. Hence, the Samsung Galaxy Note 9 is expected to be culled from its production list and the company will likely focus on the Galaxy S10 and its Galaxy F, the first-ever foldable phone to hit the market.

Screen ratio of the 10.5-inch AMOLED display has been changed to 16:10 from 4:3 of its predecessor Galaxy Tab S3 for a more immersive visual experience, Samsung officials said. In addition, Samsung plans to diversify its customer base for mobile APs from China and develop chips for use in automotive and IoT applications.

Analysts expect Apple to report an increase in revenue as well as profit for its third quarter Tuesday, helped in part by the resilient sales of the iPhone lineup.

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