Samsung said revenue in the second quarter feel due to "softer" sales of smartphones, particularly the Galaxy S9, and display panels in what it called a "stagnant" and "sluggish" market. The company raked in $52.1 billion in revenue (58.48 trillion South Korean won) at today's exchange rates, and it made $13.3 billion in operating profit on that haul (14.87 trillion KRW).
Samsung Electronics' semiconductor division enjoyed record-high earnings in the second quarter of 2018, driven by robust demand for DRAM memory used in data center applications and NAND flash chips for high-capacity storage.
The company's semiconductor unit is still its biggest cash cow, but profit growth has stabilized in 2018.
Demand for Samsung's flexible OLED panels also dropped, while LCD shipments fell in price and quantity. While Samsung's position as the world's largest smartphone maker is still secure, lower-priced models are tempting some users away from the brand.
Demand for smartphones and tablets is forecast to increase in the second half as the market enters a period of strong seasonality, but competition is seen intensifying as new smartphone models are released. Analysts were estimating that the smartphone giant only shipped around 31 million Galaxy S9 phones since its release in March.More news: Devastating wildfires a "new normal" for California, Gov. Jerry Brown says
Samsung Electronics Co Ltd posted its slowest quarterly profit growth in more than a year on Tuesday due in part to weak sales of its Galaxy S9 smartphones, and warned of tougher competition ahead for the struggling mobile sector. The company also said it's taking various steps to improve its competitiveness in the mobile business, including an early Galaxy Note 9 launch, cutting-edge technology, new form factors, and gaining leadership in 5G tech. Slated to be launched at Samsung's Galaxy Unpacked event on August 9, the smartphone maker has started taking pre-registrations for the forthcoming device.
Samsung recently announced that it is going to be mass producing LPDDR5 DRAM chips for smartphones, tablets, servers and other businesses, hence branching out even further for revenue generation. Also, Samsung plans to strengthen price competitiveness and adopt advanced technology in the mass models.
A few days ago, we learned that Huawei is looking to beat Samsung to market with a foldable phone of its own, just so that it can claim the "world's first" title. The ongoing reports and rumours suggest that Samsung could loosen its purse strings for the hardware of its Galaxy A (2019) series of phones. It was Samsung's slowest profit growth for the company in more than a year.
"We are hoping that such adoption will serve as a catalyst in the stagnated mobile market", said Kyeong Tae Lee, who is the vice president of Samsung's mobile business.