Weak Galaxy S9 demand cuts into Samsung profits

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Samsung Galaxy S9
This guy is running away from the Galaxy S9, like a lot of other people.
Photo: Samsung

A few months ago, Apple surprised everyone by announcing its latest smartphone was a huge hit, resulting in better than expected earnings and a big jump in company shares. That didn’t happen to Samsung.

Instead, the Korean company missed analysts’ profit expectations, partially because of sluggish demand for the Galaxy S9.

The S9 and S9+ debuted in March, while the iPhone 8 came out last autumn. Newer devices typically sell better than older ones. so one could expect Samsung’s new flagship models to be outselling Apple’s simply because of where each is in their respective product cycles. Nope.

The iPhone 8 was the best-selling smartphone in the world in May, the most recent month for which there is data.

Samsung’s Q2 results

In the April-June quarter, Samsung’s income was 14.8 trillion Korean won ($13.2 billion). That’s well below the 15.3 trillion won (13.7 billion) analysts has been expecting, according to Bloomberg. These are still preliminary results, but the final ones aren’t likely to be any better.

As a result, Samsung shares dropped 2.3 percent today. This is on the same day rival Apple’s share price climbed 1.4 percent.

Looking ahead

Samsung’s fortunes for the rest of the year now hinge heavily on the Samsung Galaxy Note 9. This will almost certainly be announced in early August, a month ahead of the 2018 iPhone reveal.

Unconfirmed reports indicate it will have a 6.38-inch screen, just marginally larger than the 6.3-inch display in the Note 8. This device reportedly will offer more storage capacity than its predecessors, and a bigger battery too. Not surprisingly, these will increase the overall size of the device. Of course, it will come with a stylus, as do all the Galaxy Note models.

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