Samsung: Led by a lack of demand, the manufacturer sees its profit halved this quarter

The South Korean giant Samsung is going through a contrasting period, with smartphone sales up but profits down sharply. 

In the wake of the first quarter of 2019 marked by a significant decline in operating profits, Samsung Electronics, the broad-based electronics industry of the group, released the results of the second quarter. And they do not really encourage optimism, as the slowdown is deep.

A collapse of profits

Samsung Electronics generated a turnover of 56.13 trillion won in the second quarter (or 42.7 billion euros), down 4% year on year. On the other hand, the company managed to do a little better than the previous quarter (40 billion euros), already down sharply over a year.

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You'll understand, Samsung does not display great form, it's the least we can say. In the second quarter, operating profits reached 6.6 trillion won(or 5 billion euros), down sharply by 55.62 %. The company is far from enjoying the setbacks of Huawei, which has a reverse curve, which is not to reassure leaders in Seoul.

The flea activity at half-mast, sales of smartphones resist

Several reasons explain the unconvincing results of the South Korean firm. On the one hand, it is a victim of geopolitical tensions that slow down international trade amidst tensions between Japan and South Korea. On the other hand, and according to his own admission, weak demand and falling component prices hurt him, especially with regard to his semiconductor business (chips) , which generated business of 16.09 trillion won (12 billion euros) and recorded an operating profit of 3.4 trillion won (3.4 billion euros), the lowest . Over a year, this last result plunges 71%.


In its misfortune, Samsung consolidates its position as the number one smartphone sales, with a 7% increase in shipments, for 76 million mobiles sold in the last quarter. This paradoxical situation is explained by the strong sales of the Galaxy A range, especially the A50 and A70, offered at rather aggressive prices. 

But Samsung suffers on the high end where sales of the Galaxy S10 are disappointing, with no hope of a surge in figures in the second half, where demand in the mobile market is expected to remain low, despite the gradual arrival of 5G. 

A word finally from the divisionSamsung's Consumer Electronics, which generated revenue of 11.07 trillion won (8.4 billion euros), up 6 percent year-on-year, with operating profits so positive at 540 million euros (+ 39%). The launch of new models and sales of its QLED televisions have led the division towards success. A very slight consolation.