Samsung Electronics on Tuesday reported a massive 60 per cent drop in operating profits (year-on-year) in the first quarter of 2019. This is due to weak demand in the memory chips and display in the market. However, the company said that the newly launched Galaxy S10 smartphone is generating great sales for the company.
The company has shipped 78 million smartphones and five million tablets in the quarter. Samsung has posted an operating profit of 6.2 trillion won ($5.4 billion approx.) - from 15.64 trillion won ($13.4 billion approx.) last year and quarterly revenue of 52.4 trillion won which fell 13.5 per cent.
Samsung went on to say, "The Semiconductor business saw a drop in memory chip prices as inventory adjustments continued at data centre companies, while demand for high-density memory for mobile phones increased thanks to new flagship smartphones".
According to the South Korean giant, the company expects limited improvements in the memory chip market in the second quarter, followed by the demand that will likely improve in the memory chip market in the second quarter as the demands will improve for major applications like mobile products but price declines will continue.
There was quarterly loss in the display panel business due to decreased demand for flexible displays and an increase in market supplies for larger displays.
Other reports of the IT & Mobile Communications (IM) division suggest that solid sales of the Galaxy S10 profitability in the mobile business declined (YoY) as competition intensified in the low- to mid-range segment.
The company plans on strengthening its product line-up via innovations such as Galaxy S10 5G and Galaxy A80, along with continued recognition of its product offerings.
In the first half, despite the intensified market competition, the company expects smartphone sales to increase followed by new models that include all segments from Galaxy A series to the Galaxy Note aiming strong seasonality.
Samsung said, "In the premium segment, the company will strengthen its leadership through the new Galaxy Note as well as its innovative products such as 5G and foldable smartphones".
This means that the Samsung much awaited foldable device like the Galaxy Fold, which had met with cracking screen controversy may arrive later this year.
The company added, Sales of premium TVs such as QLED TVs and ultra-large size models contributed to the (YOY) earnings growth in the Consumer Electronics (CE) division.
(With IANS inputs)