Slow Galaxy S9 sales may lead to a drop in profits for Samsung, according to analysts
For the past six fiscal quarters, Samsung has continued to grow its profits year-on-year thanks to strong growth in the semiconductor sector. However, if the latest predictions from industry analysts are correct, Samsung looks set to post a decline in Q2 of 2018, and it may all be down to slow smartphone sales.
According to analysts, Samsung’s profits are expected to sit at $13.64 billion for the three-month period, representing a decline of 6%, while overall sales will also see a decline of 5% to $53.4 billion. This is due, in part, to slow Galaxy S9 sales that are seemingly lagging behind those of the Galaxy S8 series. In fact, despite topping global sales during April of this year, analysts are now forecasting no more than 30 million sales for the Galaxy S9 lineup throughout 2018, which is the lowest number since the Galaxy S3 back in 2012. This may come as a surprise to many after the lineup’s initial popularity, but it’s claimed that demand leveled off shortly after the launch, with one of the main factors being an increase in competition from rival Chinese companies. Additionally, analysts claimed Samsung’s move to reduce profit margins in the low-end smartphone segment has also taken its toll on the company.
Despite the gloomy predictions for this quarter, analysts are expecting a big boost in profits during Q3 and Q4 of 2018, although these aren’t necessarily related to smartphone sales. Instead, it’s predicted once again that the South Korean company’s semiconductor business will be the driving force behind growth, although smartphones sales are expected to receive a boost thanks to the launch of the Galaxy Note 9.
Overall, the predictions for Samsung’s smartphone business aren’t overly positive, but with the redesigned Galaxy S10 slated to arrive in January, and the brand’s first foldable smartphone set for a launch in February, the popular brand is certainly on track to rebound during the first quarter of 2019.
According to analysts, Samsung’s profits are expected to sit at $13.64 billion for the three-month period, representing a decline of 6%, while overall sales will also see a decline of 5% to $53.4 billion. This is due, in part, to slow Galaxy S9 sales that are seemingly lagging behind those of the Galaxy S8 series. In fact, despite topping global sales during April of this year, analysts are now forecasting no more than 30 million sales for the Galaxy S9 lineup throughout 2018, which is the lowest number since the Galaxy S3 back in 2012. This may come as a surprise to many after the lineup’s initial popularity, but it’s claimed that demand leveled off shortly after the launch, with one of the main factors being an increase in competition from rival Chinese companies. Additionally, analysts claimed Samsung’s move to reduce profit margins in the low-end smartphone segment has also taken its toll on the company.
Despite the gloomy predictions for this quarter, analysts are expecting a big boost in profits during Q3 and Q4 of 2018, although these aren’t necessarily related to smartphone sales. Instead, it’s predicted once again that the South Korean company’s semiconductor business will be the driving force behind growth, although smartphones sales are expected to receive a boost thanks to the launch of the Galaxy Note 9.
Overall, the predictions for Samsung’s smartphone business aren’t overly positive, but with the redesigned Galaxy S10 slated to arrive in January, and the brand’s first foldable smartphone set for a launch in February, the popular brand is certainly on track to rebound during the first quarter of 2019.
source: The Chosun via: Wccftech
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