Samsung smartphone sales expected to drop two percent in Q2 2018

A lack of smartphone innovation is thought to contribute to Samsung’s sales woes

Analysts believe that South Korean electronics giant Samsung is set to announce that smartphone sales have dropped in its second quarter for 2018.

According to a report from Reuters, analysts are expecting that Samsung’s smartphone sales have dropped approximately two percent during the company’s April to June 2018 quarter.

Part of that may have to do with the fact that the company’s 2018 Samsung Galaxy S9/S9+ devices haven’t been perceived as enough of a meaningful upgrade over the company’s 2017 Galaxy S8/S8+ devices.

“Functions [that] Samsung’s mobile phones have are not attractive enough for customers to spend more money on,” said Song Myung-sup, an analyst at South Korean HI Investment & Securities, in an interview with Reuters.

Reuters reported that analysts expect an overall profit of 14.9 trillion won (roughly 17.5 billion CAD). That figure represents a 5.7 percent increase when compared to last year, but a 4.7 percent decrease when compared to Q1 2018.

Shobhit Srivastra, an analyst for Hong Kong-based research firm Counterpoint, told Reuters that part of Samsung’s troubles stem from the fact that competitors have been able to rely on online sales to reduce overall smartphone costs.

In contrast, Samsung relies on traditional smartphone distribution methods — like telecom carriers — to sell its devices.

Reuters also spoke with Park Jung-hoon, an analyst for South Korean HDC Asset Management, who said that a lack of smartphone innovation has also contributed to Samsung’s lower device sales.

“Samsung has to show something that will change the paradigm,” said Park, in an interview with Reuters.

“Market watchers don’t have high expectations for its smartphone business at the moment, when Chinese players have already caught up in technology and ideas.”

Samsung is currently the world’s leading smartphone device manufacturer, having sold approximately 74 million units in Q4 2017, according to U.S.-based market research firm Gartner.

Cupertino computing giant Apple is the world’s second-ranked smartphone-seller, having sold 73.2 million units in Q4 2017.

However, in markets like China and India, Samsung’s hold on the smartphone sales market isn’t as notable as in other parts of the world.

Reuters reported that Samsung’s Chinese market share was approximately 1.3 percent in Q1 2018, while Chinese device manufacturer Xiaomi dethroned Samsung in India last year.

Of course, no one should feel sorry for Samsung quite yet. Reuters reported that the company’s chip manufacturing business is expected to grow by approximately 50 percent in Q2 2018, compared to Q1 2017.

At the time of writing, Samsung’s stock sits at 46,520 won (roughly 54.44 CAD).

Source: Reuters