On Tuesday, Samsung Electronics posted a lackluster earnings report for the second quarter of 2018, although the firm claims good business in the semiconductor manufacturing front.
According to recent reports, the South Korean tech giant's growth rate took a plunge at 0.1 percent in Q2 2018, putting blame on the weak sales performance of its latest flagship product, the Samsung Galaxy S9, among other reasons.
Between the period of April and June, the electronics company listed USD$9.9 billion in profits, almost tying the result with its previous earnings in the same period of 2017.
In sales revenue, the figures dropped by 4 percent to USD$52.3 billion. All the while, operating profit rose 5.7 percent on a yearly rate to USD$13.3 billion, as specified in the company's regulatory filing.
In a statement released during an earnings call, Samsung attributed "softer sales of smartphones and display panels" in the recent profit plummet.
Despite being touted as the maker's most-advanced, feature-rich iteration of the Galaxy S series, the Galaxy S9 failed to take off in the market. Analysts, however, have long been expecting this unpleasant scenario for Samsung, which actually follows the flop that Galaxy S3 suffered in its 2012 outing.
Samsung also points fingers on the poor sales of its display business. A lot of people in the tech world may already know that much of the screens for iPhone were manufactured for by the South Korean firm. The reported lower demand for Apple's latest phone, the iPhone X, somehow equates to the "weak demand" for Samsung's OLED panels.
Tech pundits are, however, quite hopeful for Samsung to pick up steam when the year enters the second half as the American phone company is rumored to launch not one, but two OLED-screened devices for its iPhone line.
Yet another reason for Samsung's weak quarterly financial report is the stiff competition in the smartphone market.
Apparently, the rivalry isn't now just about Samsung vs. iPhone. With the entry of prominent Chinese phone makers like Xiaomi and Huawei, the situation has just become even more interesting.
The two latter-mentioned brands are now rapidly taking over the mid-range to flagship smartphone categories with their quality phone products which, according to a lot of tech pundits, exceed the current industry standards.
On a positive note, Samsung's semiconductor sales are doing great with an operating profit posted in Q2 to be around 45 percent year-over-year to USD$10.3 billion.
While Samsung is expecting smartphone and tablet demand to remain stagnant, if not lagging, the company sees a bright future in the ever-growing sales of its microchips.
