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Seoul-
Samsung Electronics
The second quarter net business figure stagnated, a sharp decline in mobile phone profits having brought down the results thanks to the strength of the memory chips.
The world's leading phone maker ships one out of every five smartphones in the world. 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 figure including its telecommunications network equipment business, decreased 20% to 24 trillion won South -Korean ($ 21 billion), 30.01 billion won a year earlier. 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 fell to 58.5 billion won from 61 trillion
Analysts surveyed by S & P Global Market Intelligence expected the company to post a net profit of 11.1 billion won and a turnover of 58.8 trillion won. enough 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, analysts 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, analysts say. In a recent research note, Susquehanna analyst, 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.
Write to Timothy W. Martin at [email protected]
Appeared in the print edition of July 31, 2018 under the name of "Weakness in Profit from Mobile Hits" at Samsung ".
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