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Samsung Electronics Co is expected to post its weaker earnings growth in more than a year in the second quarter, while weak sales of its high-end Galaxy smartphones overshadow its highly profitable chip business. the quarter of April-June, after a fall of more than 2% in the previous quarter, Chinese consumers rushing to cheaper models like Xiaomi Corp.
Samsung's position on Apple in the global smartphone market is under pressure. The iPhone X has exceeded market expectations while Samsung's technology offerings lacked technological innovation.
"Functions (as) Samsung's mobile phones are not attractive enough to spend more money" says Song Myung-sup, an analyst at HI Investment & Securities.
The latest Samsung Galaxy S9 flagship phone, launched in mid-March, offers many software but little technological magic. It is about to sell less in its launch year than its predecessors Galaxy S8 sold in 2017 after its debut, according to analysts.
This should dampen earnings growth when the Korean conglomerate posts its second quarter results on Friday.
Analysts expect KRW operating profit of 14.9 trillion ($ 13.3 billion) for the quarter, up 5.7% from the previous year. previous year, but below KRW's record of 15.6 trillion in the March quarter. 19659002] Samsung, whose shares are down 9 percent since the beginning of the year, is also expected to release forecasts for the quarter from April to June, Friday, giving estimates for income and the operating profit. It will reveal detailed results late July
Chinese Challengers
Samsung relies on traditional distribution to sell phones, while its competitors take advantage of online sales to offer high-end smartphones at competitive prices . Shobhit Srivastava says
Some investors are skeptical as to whether Samsung's next range of foldable phones with stylish OLED displays will be innovative enough to gain traction with customers. The new Galaxy Note will debut August 9 in New York
"Samsung has to show something that will change the paradigm," said Park Jung-hoon, a fund manager at HDC Asset Management who owns shares in Samsung Electronics . [19659002] "Market watchers do not have high expectations for smartphones right now, while Chinese gamers have already taken technology and ideas."
In China, the world's largest smartphone market In the first quarter, according to data from the research firm Strategy Analytics, compared to that of Huawei, 22.5%.
Huawei, Oppo, Vivo and Xiaomi, Chinese manufacturers of smartphones, ranked first in China, while Apple In India, Xiaomi supplanted Samsung as the market leader last year and has continued to dominate the world's second largest smartphone market in the first quarter, according to a report from the company's Counterpoint research.
Be sure, Samsung remains the world's largest smartphone maker, selling around 80 million gadgets per quarter and holding more than a fifth of the global market.
Difficulties in the mobile sector overshadow the success of its chip business, which generates about three The operating profit of the chip sector is expected to increase by about 50% to a record level of 12, 5 trillion won in the second quarter compared to a year ago, analysts said. servers, gaming PCs and cryptocurrency extraction devices require greater firepower to process data continuously.
© Thomson Reuters 2018
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