Samsung Hopeful Foldable Phone Would Recharge Profit After Galaxy S9 Disappointment

Samsung Electronics is now hoping for its upcoming Galaxy X to improve its profit following the sluggish sales of its Galaxy S9 flagship phone. The South Korean tech giant thinks its foldable phone could help keep its lead in the global handset market.

Analysts disclosed to Nikkei Friday that Samsung is now counting on its Galaxy X foldable phone to recharge its profit after the device’s launch early next year. The company already posted its earnings guide for the second quarter and, as expected, it didn’t do well due to the Galaxy S9.

Samsung revealed in a press release that its consolidated sales for the second quarter were around 58 trillion won or U.S.$52 billion. On the other hand, its consolidated operating profit was at 14.8 trillion or US$13.2 billion. Compared to the 14.07 trillion won profit from last year’s second quarter, Samsung’s performance improved, but it failed to reach the market’s estimate of $15.2 trillion won, as pointed out by Yonhap.

“We expect weak Galaxy S9 sales to be the main driver of the quarter-on-quarter earnings decline,” Daiwa Capital Markets analyst S.K. Kim said. “For display, we expect review to decline by 10 percent quarter-on-quarter due to a decline in LCD prices and weak demand for iPhone X in the second quarter of 2018.”

Samsung’s operating profit estimate for the second quarter was also lower than the 15.6 trillion won or US$14 billion profit it generated during the January–March period. Samsung is expected to post its finalized earnings report later this month. But as early as now, analysts are viewing its second quarter performance as the first decrease in seven quarters.

IBTimes previously reported that Samsung is preparing to launch its Galaxy X foldable phone at CES 2019 in January and its Galaxy S10 flagship handset at MWC 2019 in February. Earlier reports claimed that it’s the other way around and the S10 would be launched earlier than its predecessor.

Expectations are high for Samsung’s foldable phone, which provides a bigger display experience when not folded. The device will enter mass production later this year ahead of its unveiling in the first month of 2019. When CEO Koh Dong-jin spoke about the Galaxy X at a press briefing in Las Vegas earlier this year, he admitted that he was eager to introduce the foldable device.

“We are preparing for foldable phones very intensely. I am eager to make foldable phones because their impact on the industry will be very big. They will provide a good experience to consumers if we make them well,” Koh said at the time.

Samsung has since acknowledged its plan to expand its smartphone portfolio. However, it didn’t reveal any detail about its anticipated foldable handset. “We are dedicated to continuing to evolve our smartphone portfolio to provide our customers with devices that enhance their lives and open the possibilities to new experiences,” a spokesperson for the company said.