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Seoul-
Samsung Electronics
Co.
Net profits in the second quarter remained unchanged, as a sharp decline in mobile phone profits lowered the results, which were supported by the strength of the memory chips.
The world's leading phone maker ships one in five smartphones. But consumers are keeping their devices longer than before and balking price tags for new high-end phones at $ 1,000 or more.
For the quarter ended June 30, Samsung said its mobile division business turnover including its telecommunications equipment business network, declined 20% to 24 trillion won south- Korean, 30.01 billion won a year ago. The unit's operating profit fell to 2.667 billion won from 4.06 billion won last year.
Samsung, in its earnings release, said it would try to rejuvenate its sales by moving its flagship Galaxy Note 9 phone, as the big-screen handset debuts at a New York event on Aug. 9, weeks earlier than the model of the previous year. The company also reported that it would be more aggressive on prices.
South Korea's Suwon said its overall net profit was 11.04 billion won, up from 11.05 billion won a year earlier. The turnover dropped from $ 61 trillion to $ 58.5 trillion
Analysts surveyed by S & P Global Market Intelligence were expecting a net profit of 11.1 trillion won and a net profit. business of 58.8 trillion won for the quarter.
to stop what had been four consecutive quarters of record profits. The performance was largely driven by strong demand for memory chips made by Samsung, which are going into competitors' smartphones, standalone cars and data servers. Last year, Samsung exceeded
Intel
Corp.
as the world's largest chip maker by revenue.
For the current quarter, Samsung's dominance as a memory chip provider has helped dampen the blow of its smartphone struggles. Semiconductors accounted for 78% of the operating profits of the firm, reaching 11.61 trillion won, the best results of the division.
With smartphones, lower sales of Samsung's high-end devices, especially the Galaxy S9, surprised mobile executives, The Wall Street Journal reported earlier this month. Sales of the Galaxy S9, which hit the shelves in March, could be 20% or more below that of the previous year's model, badysts said.
The acidification market has prompted executives to pursue plans to introduce a foldable screen phone by the beginning of next year. Such a device would create a whole new category of products and would have a screen the size of a tablet, which can be folded into the consumer's pocket.
Samsung's handset division is particularly threatened by a slowdown in mobile sales. to sell new devices to consumers. Unlike his rival
Apple
Inc.,
Samsung does not offer any major business selling services, such as an application store or streaming music, that can earn revenue to existing phone users who do not want to perform any business. upgrades.
Outlook for the Galaxy Note 9 coming out soon, badysts say. In a recent research note, Susquehanna badyst, Mehdi Hosseini, expected that sales of the Galaxy Note 9 big screen will only reach 5 million devices this year, sharply down from the 12 million Galaxy Note 8 sold last year.
which suffered a 50-to-1 stock split in May, are down about 9% this year, as investors wonder how long the recent success of the chip to memory will last.
Written at Timothy W. Martin at [email protected]
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