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Samsung's second quarter was due to soft smartphone sales



Samsung has the feeling of the pain from the decline in the smartphone.

The South Korean electronic giant on Monday reported a 6 percent increase in operating profit, the lowest growth in profits for more than a year. It also recorded a 4 percent increase in revenue, as it benefited from continued strong demand for memory chips, which are used in everything from phones to servers.

But revenues were damaged by a decline in demand for their latest phones, the Galaxy S9 and S9 Plus, which included relatively small tweaks from their predecessors. Revenues in Samsung's mobile division fell 22 percent in the quarter to $ 22.67 billion ($ 20.2 billion). The company also warned that "the market condition will probably remain challenging in the second half, including price competition and new product launches."

The company said it would respond to the decline with the early introduction of a new Galaxy Note.

The smartphone market has fallen in recent quarters. It has become harder for handset vendors to make major changes in their devices and to distinguish themselves from each other. Prices for the latest and best phones have actually increased at the same time. US carriers have got rid of subsidies. All this meant that people waited longer to upgrade.

Analysts had expected Samsung's smartphone sales to fall in the quarter after reporting a decline in demand for the latest phones in the first quarter. The results are not a complete surprise; The company warned in April that the results from other quarters of mobile operations should decline sequentially "due to the continued sales of flagship models due to weak demand and increase in marketing costs."

Samsung is best known as the world's largest phone and TV maker, but it also sells more memory pills than any other company on the planet. Last year, Samsung became the world's largest semiconductor producer in terms of revenue, and expels the long-term leader Intel.

This quarter, Samsung's revenue revenue increased 33 percent to 1

8.5 trillion ($ 16.5 billion). Total sales of semiconductor businesses increased by 25 percent to 21.99 billion (19.6 billion).

Samsung said that profits in its display business were damaged by slow demand for flexible OLED panels and falling prices on LCD panels. (Flexible OLED monitors allow smartphone manufacturers to curve the displays on their devices.) The company said it expects increased demand for flexible OLED panels to drive earnings higher in the second half of the year.

Overall, Samsung reported sales of 58.48 trillion (52.3 billion) and operating profit of 14.87 billion (13.3 billion).

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