Samsung today said it is likely to post its lowest quarterly profit in two years when it announces its second quarter results later this month. The operating profit likely fell by 24.5 percent during the quarter with slowing smartphone sales and a stronger Korean won. Also Read - Samsung Galaxy S22 could get 50MP main rear camera sensor, not 108MP
Samsung’s operating profit fell to 7.2 trillion won ($7.12 billion), which is the lowest since it posted 6.5 trillion won in the second quarter of 2012, Reuters reports. Also Read - Samsung Galaxy A22 5G India launch nearing as support page goes live
While Samsung forecasts better results in the third quarter and is pinning its hopes on a new smartphone lineup, recovery could be much further down the road. Samsung’s smartphone portfolio is facing heavy competition from cheap smartphones from Chinese vendor in the low-end segment and Apple’s iPhones in the high-end segment, with Samsung’s flagship smartphone failing to inspire consumers. Also Read - Samsung Galaxy Chromebook Go powered by Intel Jasper Lake Celeron processor revealed
Things could get worse towards the end of the third quarter when Apple is expected to announce iPhones with bigger displays. Apple’s announcement of an iPhone Air with a bigger 5.5-inch display could affect sales of Samsung’s Galaxy Note phablet that is expected to be launched around the same time.
On the other end of the spectrum, Google is expected to launch the first smartphones on the Android One platform in India, which could pose danger to Samsung’s entry-level smartphones that form nearly half of its shipments in the country.
In order to remain competitive in the entry and mid-levels, Samsung could look at price corrections, which could further impact its ASP and profit margins in the next quarter.