Samsung second-quarter profit dips on slower demand for Galaxy smartphones

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High marketing expenses as well as the lackluster performance of the flagship S9 smartphone, which did not meet its sales target, dragged down its mobile performance, Samsung stated.

Despite some bumps in the road, the company's outlook remains sunny for the second half of 2018. Analysts were estimating that the smartphone giant only shipped around 31 million Galaxy S9 phones since its release in March.

Samsung is planning on canceling the production on Samsung Note further on.

With the chip business accounting for a whopping 78.1 percent of the combined operating profit in the second quarter, however, industry watchers said Samsung should do more to ease such a heavy dependency. Samsung is set to launch a new Note next month.

Xiaomi and Huawei have made massive inroads in the Chinese and Indian markets, which are the two largest smartphone market pools on the planet.

In the Display Business, the Company saw weak demand for flexible OLED panels in the second quarter while the shipment and price for LCD panels also fell.

Overall earnings were sharply down from the 11.69 trillion won net profit registered last quarter, when the company reported a 52% jump on year.

Samsung's chipmaking unit, which dominates the global market after the firm invested tens of billions of dollars to build and expand factories, provides chips for Samsung devices as well as those manufactured by competitors including Apple.

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In the near term, Samsung stated that competition would intensify in the second half as newer smartphone models were released, compelling it to introduce a new Galaxy Note earlier than usual.

Samsung is due to announce the latest iteration of the Galaxy Note smartphone next week, which it said would hit shelves sooner than previous years.

In other segments of Samsung's business, the World Cup apparently helped strengthen demand for Samsung's premium QLED TVs, leading to higher profits from its consumer electronics division.

It's also thought that Samsung will push its display technology to a new level with an unbreakable edge-to-edge screen that covers every corner of the phone. It was Samsung's slowest profit growth for the company in more than a year.

Looking to the second half, the TV market is projected to grow YoY, especially in developed economies.

The disappointment was greater in Samsung's information technology and communications business, which includes its smartphones. Revenue was also down 20 percent year on year to 24 trillion won.

Analysts also noted Samsung's ongoing failure in China, where it previously owned a double-digit share of the market.

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