“Although revenue increased, profits increased marginally QOQ, due to supply difficulties from higher than expected market demand for the Galaxy S6 Edge”, the statement added. It pledged to concentrate on keeping its share of high-end sales by lowering the price of its S6 and S6 Edge and introducing new large-screen models, the Galaxy Note 5 and S6 Edge Plus, which will be released in August. Operating profits went down by four percent at 6.9 trillion won or $5.9 billion. The 2.76 trillion won in profits were a drop of almost 38 percent from the division’s performance in the same quarter of 2014.
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“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, analyst at Eugene Investment and Securities. Sales of tablets were flat at about 8 million.
“Total sales of the S6 and S6 edge during the second quarter were below expectations”, Park Jinyoung, a vice president at Samsung’s mobile communications team, said on a conference call.
Samsung expects robust semiconductor sales to continue as new smartphones are unveiled and servers and PCs increasingly use solid state drives with NAND flash chips.
The company sold 89 million mobile phones in the second quarter, down 6.3 percent from the first quarter. Thursday’s result showed clearly a contrast between the falling fortunes of the handset division which is fast losing its position as the biggest seller of smartphone to Apple and Chinese companies and a booming semiconductor division which is being fed by the demand from its rivals.
It’s also said to have a 720p display, which would be mildly disappointing given that the Galaxy S6 is QHD, but should help keep the cost down.
This month, the company scraped through a shareholder vote on the proposed merger of two affiliates, after a US hedge fund led an unprecedented investor revolt against the deal.
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Despite slowing sales, Samsung remained the world’s top smartphone vendor in the second quarter with a global market share of 21.7 percent, according to a quarterly survey by research firm IDC.
