It’s a far cry from just a few years ago, when the company could still rely on its mobile division to deliver major profits – especially in China.
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Quarterly sales at Samsung’s telecommunication division decreased 8 percent to 26.06 trillion won, with a 7 percent decline in mobiles sales amid lower sales of middle-to-low end models and increased marketing expenses.
But the bigger story perhaps was the fact that the company reported disappointing smartphone sales, including that of its flagship smartphones, the Samsung Galaxy S6 and Samsung Galaxy S6 Edge.
“Samsung’s semiconductor business has a pretty good outlook down the road, but weakening demand for smartphones, LCD TV and personal computers will not be enough to improve future earnings”, said Lee Jeong, an analyst at Eugene Investment and Securities.
At the beginning of July, Samsung revealed that it was expecting some deeply underwhelming second quarter results, and so it has proved. The increase was thanks to Samsung’s smartphone unit switching to the company’s own chips instead of ordering from other suppliers like Qualcomm. At present, the Galaxy S6 (32 GB) costs Rs 39,850 while the curve-screened S6 Edge (32 GB) is listed for Rs 47,949 on e-commerce site Amazon.
Samsung Electronics Co Ltd offered a downbeat outlook for the third quarter after April-June profit dropped on a supply shortage for one of its main smartphone models, underscoring continued headwinds for the tech giant. Samsung, the biggest seller of phones using Google Inc.s Android software, brought forward the release of its next high- end device and is adding cheaper models. Total operating profit was 6.9 trillion Korean won ($5.9 billion), slightly better than expectations. The report was based on preliminary Q2 Samsung results.
At a separate board meeting, Samsung also doubled interim dividend to 1,000 won per share.
The company also miscalculated demand for its curved-screen Galaxy S6 Edge phones, leading to a supply shortage that ate into profits.
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In an attempt to cushion the continuing slide in earnings, Samsung has advanced the timing for the launch of its flagship smartphone/tablet hybrid device, likely called the Galaxy Note 5, by about three weeks from its usual launch period.
