Samsung recently reported its worst sales performance in the year, having suffered an eye-watering 95% decline in its profits for the second quarter of this year. That same decline, by the way, echoes the same loss in profits in the previous quarter.
In its newsletter, Samsung says that it “posted consolidated revenue of KRW77.2 trillion, a record for the second-quarter, and operating profit of KRW14.1 trillion (~RM48.2 billion), a 12% increase from a year earlier. The DS (Device Solutions) Division reported a historical high in quarterly revenue for the second consecutive quarter while the DX (Device eXperience) Division posted a significant year-on-year revenue growth.”
While that may sound healthy, the actual profit Samsung was able to procure in the second quarter was only KRW0.67 trillion (~RM2.63 billion). By comparison, that’s a fraction of the alleged KRW14.1 trillion that it claimed to have consolidated.
One reason for severe decline in profits that Samsung is wholly and squarely fingering is the decline of smartphone shipments globally. It also doesn’t help the Korean brand’s situation that it is currently sitting on a glut of unsold chips, and that in turn has led to lower prices and, naturally, lower profits. Further, while memory makers hoarded their chips during the pandemic and offloaded them back in November 2022, the brand chose to hold out until April of this year but alas, it was too late by then.
Samsung initially believed that the launch of its Galaxy S23 Ultra would have the company regain some profit that it loss in the first quarter as well, but due to global economic factors like high interest rates and inflation, the hype for the device very quickly dissipated. With the launch of its Galaxy Z Flip5 and Fold5 foldable smartphones last week, the company believes that the new medium would be the “new standard of smartphones” and should help it bounce back into the black.
(Source: Samsung, Ars Technica)
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