South Korean technology giant Samsung has issued a warning to its investors that it will be making less money this quarter. What further adds to this is the company‘s Q1 earnings that were recently shared. They clearly show that the profit has gone down by 60% compared to last year – from 15.64 trillion won to 6.2 trillion won, to be more precise.
However, Samsung has not placed the blame for this slide in profit on its expensive smartphones. Instead, the company has claimed that its Galaxy S10 series handsets saw good sales. Samsung also says that it shipped 78 million phones overall and 5 million tablets in Q1 2019. It further added that the reason behind any weakness in its phone sales is due to the fact that its low and mid-range models cannibalized sales of last years’ Galaxy models.
This does make sense considering that Samsung has been bringing a number of premium features to its mid-range smartphones. Last year’s Samsung Galaxy A9 was the world’s first smartphone to sport a quad-camera setup on its back panel, and the company has added a rotating camera to its recently launched Galaxy A80.
The technology giant has also added that it is expecting to ship more smartphones in Q2 2019.
But it is worth mentioning that the reasons that it has given for the fall in profit are primarily the same as last quarter. The first and foremost reason is that Samsung has seen a fall in the demand for memory chips and a decline in sales of displays. However, the company has also added that it expects this to improve in the second half of the year.
Samsung has said that it expects to see a rise in the demand for flash memory in servers, as well as for smartphones that come with 256GB storage or more. The South Korean technology giant said that it has shipped more processors and models even though the demand for image sensors is not going up any more.
Although the company did not mention its Galaxy Fold smartphone during the earnings call, when quizzed about it, Samsung did say that it would be announcing the new launch schedule for the handset “within the next few weeks”.
In a statement, the company said, “For the second half, despite intensified market competition, Samsung expects smartphone sales to increase led by new models in all segments from the Galaxy A series to the Galaxy Note amid strong seasonality. In the premium segment, the Company will strengthen its leadership through the new Galaxy Note as well as its innovative products such as 5G and foldable smartphones.”
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