Samsung Electronics said its revenue for the April-June period fell 4 percent to 58.5 trillion won or $52.28 billion — primarily due to poor demand for Galaxy S9 smartphone.
Samsung posted its slowest quarterly profit growth in more than a year as the sluggish global smartphone market weighed on earnings, though the chip business continued to perform well, Reuters reported.
Operating profit for the world’s biggest chipmaker and smartphone maker rose 5.7 percent to 14.9 trillion won or $13.3 billion in the second quarter, Samsung said in a regulatory filing.
Samsung in Q2 2018
Revenue of 58.5 trillion won (–4 percent)
Operating profit of 14.9 trillion won (–5.7 percent) or $13.3 billion
Samsung Mobile business
Operating profit of 2.7 trillion won (–34 percent) or $2.4 billion
Samsung Chip unit
Operating profit of 11.6 trillion won (+45 percent)
The Apple components supplier and smartphone rival said operating profit from the mobile business fell 34 percent from a year ago, and warned of stiffer competition in the second half due to the release of new models.
The South Korean tech giant added that demand for memory chips, its biggest earnings contributor by far, would remain strong in the second half thanks to the growth of server data centers.
Samsung faces challenges from the US-China trade war, falling prices of some memory chips and the rise of cheap Chinese-made handsets.
Samsung’s difficulties in the mobile market, which accounts for about 40 percent of its revenue, have been exacerbated by its recent lack of innovation to drive sales of its premium Galaxy series gadgets. The mobile business booked 2.7 trillion won in quarterly operating profit.
Data released by market tracker Counterpoint Research in July showed Samsung’s latest Galaxy 9 Plus premium handset had been overtaken by Apple’s iPhone 8 as the world’s top-selling smartphone.
Competition from cheaper Chinese smartphone brands such as Xiaomi and Huawei have already seen Samsung lose market share in China and India, the world’s top smartphone markets.
Samsung regained its lead in India’s smartphone market in the second quarter thanks to solid sales in its budget segment, according to Counterpoint Research.
While the mobile business struggles, the chip business remained Samsung’s top earner in the second quarter as sales to the cloud-computing and crypto-currency industries propped up DRAM chip prices even as NAND flash memory prices slipped.
Samsung’s chip unit posted a record 11.6 trillion won operating profit, up 45 percent from a year ago.