Samsung eyes mobile cuts as premium demand wanes - Mobile World Live

Samsung eyes mobile cuts as premium demand wanes

31 JUL 2019

Samsung Electronics reported weak sales momentum for its Galaxy S10 and stagnant demand for premium products in Q2, with two of the vendor’s few bright spots the performance of its Networks business and sales of A Series handsets.

Revenue from its mobile business increased 7 per cent year-on-year to KRW24.3 trillion ($20.6 billion) during the quarter, though operating profit across its whole IT & Mobile Communications division declined 42 per cent to KRW1.6 trillion. Its mobile unit contributes the vast majority of earnings from the combined division.

Samsung noted increased competition in the low- to mid-end of the mobile sector had impacted profit. Without breaking out specific figures for its networks business, it said the sector had “improved” on the expansion of 5G in South Korea and providing LTE products in overseas markets.

In Q3, the company expects to launch the Galaxy Note 10 and delayed Galaxy Fold in addition to new A Series models. It will also increase the number of handsets with 5G.

Samsung added its mobile division would: “Promptly respond to the changing business environment, and step up efforts to secure profitability by enhancing efficiency across development, manufacturing and marketing operations.”

The company also suffered a sharp decline in revenue and profit from its semiconductor division, which significantly contributed to a dive in net profit from KRW11.04 trillion in Q2 2018 to KRW5.18 trillion in the recent quarter.

Uncertainty
In its results statement, Samsung said it expected demand in the mobile unit to remain weak due to “growing uncertainties over the global economy and trade.”

It also warned its overall business faced challenges in the global macroeconomic environment.

South Korea-based Samsung and rival LG Electronics, look likely to be caught in the crosshairs of an ongoing trade dispute between their home market and Japan, a key supplier of components used in the manufacture of smartphone chips and display technology.

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Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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