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Seoul-
Samsung Electronics
Co.
Poor sales prompted a Samsung executive to make a rare acknowledgment that the world's largest smartphone maker may have been too cautious in adding bells and whistles to its handsets, as competitors have advanced with L & # 39; the company's emphasis on providing safer features "could have resulted in a conservative approach to adopting new technologies," said Lee Kyeong-tae, vice president of mobile communications activities from Samsung, on the profits of the company. call Tuesday. Mr. Lee also acknowledged that the increase in price tags "was attracting market resistance".
Samsung is in the process of absorbing the biggest blow from a smartphone industry that is struggling with a historic sales meltdown. Prices can not increase much, if at all, and Samsung is losing ground against cheaper Chinese competitors that appeal more to budget-conscious users from Europe to India, with feature-rich devices
To buy the iPhone X, they also do not have money to buy the Galaxy S9, "said Tom Kang, Seoul-based badyst at Counterpoint Technology Market Research. "Innovation has stopped, and people are looking for more value for their money."
The smartphone industry suffered its first drop in shipments last year. They fell 0.3% from 2016, according to IDC, a market researcher. Sales are expected to fall again this year.
Recession periods bring about changes in the industry. During the period from April to June, Huawei Technologies Co. is expected to have exceeded
Apple
Inc.
As the world's second largest smartphone maker, the Chinese company has made it for the first time every quarter, according to IHS Markit's projections. Samsung retains its # 1 spot.
Huawei, which aggressively targets the middle and lower segments, recorded 54 million phone shipments in the quarter ended June 30th against Apple's estimates of revenue. approximately 44 million units. Apple is, however, on track to retain its second place in 2018. Analysts expect three new iPhones in September.
Huawei said Tuesday that its unaudited sales figure in the first half increased by 15% to 325.7 billion. yuan ($ 47.7 billion) compared with the previous year with an operating margin of 14%. The private company, which also manufactures network equipment and other gadgets, has not disclosed any other figures.
Apple publishes its quarterly results on Tuesday. According to FactSet, badysts expect that the Cupertino, California, company will increase iPhone sales by 2% and sales by 17% at higher average selling prices. Apple and Samsung account for most of the profits of the smartphone industry, with iPhones accounting for the lion's share.
Although memory chip sales boosted Samsung's overall results, the company said Tuesday that mobile operating profit was $ 2.67 trillion. earned ($ 2.39 billion) for the quarter ended June 30, down 34% from 4.06 billion won a year earlier. The unit's revenue, including its telecom network equipment business, is down 20%.
The results of the mobile unit "are much worse than expected," notes Ambrish Srivastava, a BMO Capital Markets badyst, in a note to investors. The average selling price of Samsung phones has dropped by 13% compared to the first three months of the year, he added.
The troubles of the phone come two years after Samsung was confronted with a worldwide reminder of overheated Galaxy Note 7 devices. $ 6.5 billion and led to a widespread ban on carrying the aircraft on aircraft, fearing that this poses a danger to fire safety.
As a result of the fiasco, DJ's mobile chef, DJ Koh, told the company's engineers not to refrain from continuing to innovate.
Chinese companies have again beaten Samsung in the market with further progress. This year, Huawei has launched a phone with three rear cameras, while Oppo Electronics Corp. maximized screen size by adding a motorized, pop-up camera attached to the back of the camera. Vivo Electronics Corp. Earlier this year released a phone with a fingerprint sensor on the screen, a key jump because smartphone designs have thrown the physical home button in order to make room for the screens edge to edge. come so fast, they take Samsung's market share, "said Jusy Hong, a Seoul-based director at IHS Markit.
Samsung gets a shot to turn things around on August 9, when its flagship Galaxy Note Mr. Lee, the company's conference call leader, reiterated that Note 9 would be offered at "reasonable prices" and that the launch would be supported by "all our sales resources and
two areas where Samsung could rebound with potential future breakthroughs: new models of phones and handsets equipped for fifth generation wireless networks, or 5G.
The Wall Street Journal reported on July 18 that the bad sales of Galaxy S9 had prompted executives to continue their plans to introduce a foldable screen phone by the beginning of next year.Tuesday, Mr Lee did not specify the moment but said that the company was working on the durability and performance of the phone.
With the 5G, Samsung could release three generations of phones before Apple produces its own 5G device, said Patrick Moorhead, Mr. Moorhead, president of Moor Insights & Strategy, a technology consulting firm based in Austin (Texas)
"There are reasons to be optimistic" for Samsung, said Moorhead
-Tripp Mickle contributed to this article.
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