The quarterly earnings of Samsung Electronics were released on Monday (30), and in the financial report for the second quarter the operating profit of the mobile devices division is presented, and the news is not good. A 34% drop was recorded to 2,7 trillion won ($2,4 billion). It's the biggest drop since the Galaxy S7, which was a hit at the beginning of last year.
The biggest blame falls on the sale of the Galaxy S9, which is underwhelming. Samsung stated that revenue ended up falling due to "lower sales of smartphones and display panels". The Company also comments on the S9, and describes the sales performance as "slow".
Another issue that ended up helping to reduce revenue is the pressure put on by Chinese manufacturers, for having cheaper devices. Not only for the price, but the Chinese devices proved to be more innovative, with better design and more powerful hardware. These factors made the competition more arduous, taking away the hope of investors that some turnaround in the mobile phone business was possible.
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Fund manager at HDC Asset Management (which owns Samsung shares), Park Jung-hoon, said that "it's not an easy game for Samsung unless it really meets consumers' needs for new smartphones," in an interview with Reuters.
With competition in China getting stronger, the numbers show that the lower prices of other manufacturers are forcing the South Korean to reduce its margins. While Samsung shipped 80,1 million phones to market in the first quarter and 78,2 million a year later, Huawei rose from 34,5 to 39,3 million, and Xiaomi rose from 14,8 to 27,8 million. .
It's not just the sale of smartphones that is doing poorly, as Samsung is also suffering from reduced production and sales of LCD screens and low demand for flexible OLED panels. However, the situation is expected to improve with the launch of new iPhones, which use this type of screen.
Fonte: Reuters | The Verge
