Samsung profits decline again

Those new “premium models” likely refer to the upcoming Galaxy Note 5 and a new extra-large model, expected to be called the ‘Galaxy S6 edge+’.

Net income, excluding minority interests, fell to 5.63 trillion won ($6.71 billion) in the three months ended June, the Suwon, South Korea-based company said on Thursday.

The company’s mobile business reported an operating profit of 2.76 trillion won ($2.36 billion), down from 4.42 trillion won ($3.79 billion) a year earlier. Q2 smartphone sales were down from the previous quarter, as well, and Samsung blames lower sales of older phones.

Bloomberg reports that the Galaxy S6 suffered from Samsung’s misread of the S6 Edge’s demand in the market. Its expensive Next, NEXT, Big Thing campaign was, possibly, too successful.

A new headache this quarter was a shortage in supplies of curved screens used in the Galaxy S6 Edge, which meant Samsung was not able to meet demand for the well-received phone.

In brighter news, the company’s memory chip and processor division recorded a healthy 1.54 trillion won (£832m) profit, and should see further growth if the rumours of it powering the next iPhones are true.

Overall, the company’s net profit was down 8 percent year on year, and revenue dropped 7.3 percent.

Samsung said it expects growth in the smartphone market to slow in the second half of the year, with only a small sequential increase in sales in Q3. And it’s looking to other parts of its business, such as semiconductors, display panels, smart TVs, and health equipment, to help make up for lost mobile sales.

The company is reported to have won orders for the main processors in Apple’s new iPhone.

Samsung’s total handset sales for the same period stood at 89 million, down from 95 million a year ago, the company said.

For the Galaxy S6 launch Samsung took a humorous, tongue-in-cheek approach to its marketing and drafted in James Cordon in the UK to push the handset’s design and quality but in an entertaining way.

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In addition to the supply shortage for the S6 edge model, some analysts are anxious by softer demand from China and Europe.