Sam­sung ex­pects first sales drop since the Galaxy Note de­ba­cle

Financial Mirror (Cyprus) - - MARKETS -

Fol­low­ing four con­sec­u­tive quar­ters of record prof­its, Sam­sung pro­vided a dis­ap­point­ing earn­ings guid­ance for the sec­ond quar­ter of 2018 on Fri­day. The Korean elec­tron­ics gi­ant ex­pects sales of 58 tril­lion won ($51.8 bil­lion) and an op­er­at­ing profit of 14.8 tril­lion won ($13.2 bil­lion) for the three months end­ing June 30. This would mark the first profit de­cline on a quar­ter-over-quar­ter ba­sis since Q3 2016 and the first year-over-year sales de­cline since the same pe­riod.

Back in 2016, Sam­sung’s re­sults had been hit hard by the de­ba­cle sur­round­ing over­heat­ing bat­ter­ies of the Galaxy Note 7 smart­phone that had to be called back and ul­ti­mately taken off the mar­ket. This time around, an­a­lysts quoted by the Fi­nan­cial Times blame the dis­ap­point­ing re­sults on lack­lus­ter de­mand for the Galaxy S9 flag­ship phone, which was re­leased this spring. “The S9 phone was ex­pen­sive with no ma­jor dif­fer­en­ti­a­tion,” said Kim Young-woo, chief tech­nol­ogy an­a­lyst at SK Se­cu­ri­ties, of­fer­ing a pos­si­ble ex­pla­na­tion for the tepid con­sumer re­sponse. As the chart il­lus­trates, Sam­sung’s sales re­main at a very high level (and so does its profit), but the lat­est sales de­cline is an­other sign that the smart­phone gold rush for com­pa­nies such as Sam­sung and Ap­ple might be com­ing to an end as true in­no­va­tion is be­com­ing harder to achieve in a ma­tur­ing mar­ket. (Source: Statista)

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