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Samsung faces down TAB and smartphone MOUNTAIN HORROR

Sales and profit dive at mobile sub, things set to get tougher

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Samsung has confirmed sluggish sales of smartphones and tablets combined with efforts to shift the stock mountain that cast a shadow over Europe, denting group sales and profits for calendar Q2.

The Korean chaebol has been out of step with falling market demand and as exclusively revealed by The Channel back in May, Sammy UK partners were sat on more than 300,000 tabs alone that they simply couldn’t shift.

Group revenue for the three months ended June fell two per cent year on year to 52.35 trillion (£30bn) Korean won and operating profit dropped 15 per cent to 7.19 trillion Korean won (£4.1bn).

In a canned statement, Samsung noted “several factors” had caused the shrinkage, including the “slow global sales of smartphones and tablets and escalating marketing expenditure to reduce inventory”.

The mobile division posted a Q2 operating profit of 4.42 trillion won, down 30 per cent on sales of 28.45 trillion won, a top line drop of 20 per cent.

The firm said the appreciation of the currency also “chipped away” at operating profits.

Growing competition from smartphone makers including Huawei and Lenovo, and South Korean biz LG has pressure on Samsung and its global shipments into the channel slipped 3.9 per cent last quarter.

“Prospects for growth remain unclear as competition over global market share intensifies in the mobile industry,” said Samsung. It expects sales of “flagship” products to rise but profit may be hit as price is used to compete.

In the slab space, market demand in the West slowed and the feeling is that growth will be less meteoric from here on in. Here the company forecast competition to heat up amid a slowdown and again fierce price competition.

The "Others" parts of the business motored, with sales in Semiconductor and Consumer Electronics up. Displays fell, however. ®

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