Published: Wed, August 01, 2018
Markets | By Otis Pena

Samsung Galaxy S9 Not Selling as Well as Expected

Samsung Galaxy S9 Not Selling as Well as Expected

Amid the stagnant high-end smartphone market, the IT & Mobile Communications Division reported a drop in earnings, both year-on-year and quarter-on-quarter, over slow sales of the Galaxy S9.

"The outlook for the memory chip business remains strong across all applications thanks to demand for server and PC memory as well as new mobile product launches", it said in a statement.

Samsung's difficulties in the mobile market, which accounts for about 40 per cent of its revenue, have been exacerbated by its recent lack of innovation to drive sales of its premium Galaxy series gadgets.

Companies are increasingly dependent on mobile platforms to power their business operations and to enable a productive workforce-and that means hiring topnotch developers to build the apps they need.

Results dipped below an 11.05 trillion won net profit recorded for the same period past year.

"The semiconductor sector fell short of expectations but its outlook for the second half of this year is rather positive as demand for DRAM chips is solid". It will also debut a few weeks earlier than usual - a NY launch event is planned for August 9 - which Robert Yi, executive vice president for investor relations, said was part of a strategy to "address rising competition".

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Samsung said its flexible OLED technology - which it has been developing for nearly five years - would help the technology firm to rebound in the second half of the year. The Samsung Galaxy S10 will also reportedly have an in-display fingerprint sensor, but that will apparently use the less conventional ultrasound technology, as opposed to the optical sensors that have been most used so far. The Note 9 also marks the arrival of the upgraded Bixby 2.0, although the smart assistant will be rolling out to Samsung's other 2017 and 2018 flagships in due course as well.

"Consumers are losing the belief that the next version of a smartphone is actually smarter", said Paul Swiercz, a management professor at George Washington University.

Samsung will hope the new technologies will fix its struggling mobile business, whose operating profit plunged 34 per cent from a year ago, the company revealed in its first-half filing on Tuesday.

Sales fell 4 per cent to 58.48 trillion won ($52.3 billion) while operating income advanced 6 per cent to 14.87 trillion won ($13.3 billion), in line with its earnings preview earlier this month. "Its third-quarter operating profit is expected to hit 16.8 trillion won", said Lee Seung-woo at Eugene Investment & Securities.

Samsung shares slid 0.3 percent by 0620 GMT, compared with the flat broader market.

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