Samsung’s mobile business struggles in Q1

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Manufacturer acknowledges tough market and expects flat second quarter, but announces plans to release new Note device

Samsung’s mobile division struggled in Q1, predominantly as a result of decreased Galaxy S7 shipments and a lower average selling price (ASP).

Sales for the first three months declined 17 per cent year-on-year to KRW22.47 trillion (£15.36 billion), while operating profit was down in its IT and mobile division was KRW2.07 trillion (£1.41) compared to KRW3.89 trillion (£2.66 billion) a year ago.

Samsung attributed the decline in its earnings to a decrease in Galaxy S7 shipments and ASP, but said overall smartphone shipments had increased on a quarterly basis due to the release of devices such as the Galaxy A 2017 edition.

However, it is still expecting smartphone and tablet demand to remain flat across the market in Q2.

Samsung is forecasting an improvement in revenue and operating profit due to the release of the flagship Galaxy S8 smartphone, which is released across the UK tomorrow (April 28), with a focus on “early global expansion and rich marketing activities”.

However, it expects overall smartphone shipments to be flat quarter-on-quarter due to decreased sales of mid to low-end products.

Improvements ahead

For the remainder of 2017, Samsung said it is forecasting a year-on-year improvement in smartphone sales and earnings.

In the high-end segment, it will focus on increasing flagship product shipments, with the continued global expansion of the S8 and the release of a new Note model in the second half of the year.

The comes following an announcement by Samsung on April 28 that it is planning to refurbish the 2.5 million recalled Galaxy Note7 devices after a battery fault caused some to catch fire.

If added that if demand is present, with agreement from local authorities and operators, Samsung said it may resell the Note7.

 

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