Weak sales of Samsung smartphones drag down profits

Samsung Electronics forecasted its first profit decline in seven quarters on Friday, with analysts pinning the blame on weak sales of its smartphones.

The Korean giant issued profit guidance on Friday of 14.8 trillion Korean won (£10bn) in operating profit for the April-June quarter, down from 15.6 trillion in profit from the previous quarter.

The guidance ends a lengthy run of record profits for the Korean electronics company, which has seen a downturn in sales of its flagship smartphone products, analysts said.

Lee Won-sik, an analyst at Shinyoung Securities, told Reuters that “it’s going to be tough” for Samsung’s smartphone division. “The smartphone market is not growing anymore but the competition is intensifying,” he said.

Samsung had hoped that its flagship line of Galaxy phones would sell strongly in leading markets such as China and India, but the company has faced strong competition from rivals Xiaomi and Huawei.

Apple’s iPhone X, which it released in November, has also outsold Samsung’s recent flagship phones.

The Galaxy Note 9, Samsung’s next smartphone, will be announced in August. Samsung’s recent Galaxy S9 phone, which it released in June, reportedly sold the worst for a Samsung phone since 2016’s Galaxy S7.

Samsung shares are down around 12pc this year, and the weak profit guidance pushed shares 1.5pc lower on Friday.

–

Telegraph