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Samsung Electronics Co Ltd is expected to post its weaker earnings growth in more than a year to the second quarter, with poor sales of its high-end Galaxy smartphones overshadowing its highly profitable chip business.
Image: Tech2 / Rehan Hooda
Analysts expect Samsung smartphone sales to fall during the quarter. April to June, after a decline of more than 2% in the previous quarter. rivals such as Xiaomi Corp.
Samsung's leader on Apple Inc. in the global smartphone market is under pressure after the US company's iPhone iPhone X has exceeded market expectations, while a lack technological innovation. "Functions (as) Samsung's mobile phones are not attractive enough for customers to spend more money on," said Song Myung-sup, an analyst at HI Investment & Securities. [1965] 9005] The last flagship phone Samsung Galaxy S9 launched in mid-March, offers a lot of software but little technological magic. It is about to sell less in its launch year than its predecessor Galaxy S8 series sold in 2017 after its debut, according to analysts.
This should dampen earnings growth when Korean conglomerate Analysts expect operating profit of 14.9 trillion won ($ 13.3 billion) for the quarter, up 5.7 percent % over the previous year, but less than Samsung's record of 15.6 trillion, whose shares are down 9% since the beginning of the year, is also expected to release forecasts for the quarter of April-June, July 6, giving estimates for Thomson Reuters' business figure and operating results . profit.
Chinese Challengers
Samsung is relying on traditional distribution to sell phones, while competitors have taken advantage of online sales to offer high-end smartphones at competitive prices. Said Shobhit Srivastava, analyst of Counterpoint
. Some investors are skeptical about 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 Galaxy S9 Plus. Image: Tech2 / Rehan Hooda
"Samsung has to show something that will change the paradigm," said Park Jung-hoon, a fund manager at HDC Asset Management who owns Samsung Electronics shares.
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In China, the largest smartphone market in the world, Samsung's market share was only 1.3% in the first quarter. Chinese calculator companies – Huawei, Oppo, Vivo and Xiaomi – were in the top spot in China, while Apple was the only foreign company in the top five.
] In India, Xiaomi supplanted Samsung as the market leader last year and continued to take the lead in the world 's second largest smartphone market in the first quarter, according to a company report. Counterpoint studies
. ng remains the largest smartphone maker in the world, selling around 80 million gadgets per quarter and holding more than a fifth of the global market.
Its difficulties in the mobile sector overshadow the success of its chips business, which generates about three quarters of Samsung's operating profit and about a third of its revenue
The profit Operating in chips is expected to increase by about 50 percent to a record 12.5 billion won in the second quarter compared to analysts, such as servers, games, and PC operating devices. cryptocurrency require more firepower to process data continuously.
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