Samsung reports a drop in its second quarter revenue earning and has placed the sole reason on its mobile division. Despite the exemplary performance showed by the memory chip side of its business, the drop of mobile and display sales has caused the company to show a negative growth in its books.
Blaming the poor sales to sluggish premium smartphone market and intensifying competition, Samsung’s smartphone shipments and revenue declined QoQ with Galaxy S9 and S9+ not doing so well in the market. The phasing of unpopular and older models has also attributed to decline. In contrast its main rival, Huawei just reported another stellar quarter with 15% revenue increase due to higher sales from its flagship P series.
On the focus for second half of the year, the company forecasts an increase in demands for smartphones and tablets is forecast to increase in response Samsung decided to introduce a new Galaxy Note earlier than usual (August 9). Slated to have innovative applications and an enhanced S Pen, the Note series is the company’s unique proposition to a crowded mobile phone market. Sitting comfortably between a phablet and a phone, the Samsung revolutionised large screen display adoption and owns the space exclusively with its stylus offerings.
Placing its eggs on various baskets proved to be effective, the company’s business unit the Semiconductor Business continued to deliver strong earnings, driven by demand for DRAM chips used in data centers and NAND flash memory for high-capacity storage, amid a softening of NAND prices. Samsung solidified its competitive positioning by focusing on value-added products, including 64GB and higher-density server DRAM based on the 1X nanometer technology and 128GB and higher for NAND mobile storage.
The outlook for the memory chip business continues to be good for the rest of the year mainly from the strong demand for server and PC memory as well as upcoming new mobile product launches. Looking ahead, Samsung’s sustained strength will come from its memory and growing demand for flexible OLED panels.