SEOUL (Reuters) - Samsung Electronics Co Ltd (005930.KS) posted its slowest quarterly profit growth in more than a year on Tuesday due in part to weak sales of its Galaxy S9 smartphones, and warned of tougher competition ahead for the struggling mobile sector.
FILE PHOTO: The logo of Samsung Electronics is seen at its office building in Seoul, South Korea, August 25, 2017. REUTERS/Kim Hong-Ji/File Photo
The Apple Inc (AAPL.O) components supplier and smartphone rival said operating profit from the mobile business sank 34 percent from a year ago, its fastest rate of decline since the first quarter of 2017, as cheaper Chinese-made handsets put pressure on margins.
The South Korean tech giant gave investors little reason to hope for a quick turnaround in the mobile business, flagging stiffer competition in the second half amid concerns its premium phones lack innovation to drive sales growth.
“Samsung was already lost to China in price competition and is getting threatened by Chinese models in designs and hardware strength,” said Park Jung-hoon, a fund manager at HDC Asset Management that owns Samsung shares.
“It is not an easy game for Samsung unless it really meets consumers needs for new smartphones.”
Higher marketing expenses and disappointing sales of the S9, which fell short of its target, weighed on its mobile performance, Samsung said.
Competition would heat up in the coming months as new smartphone models were released, it added. In response, Samsung would “seek to expand sales by introducing a new Galaxy Note earlier than usual”, it added.
Samsung is scheduled to launch a new Note series early next month.
Apple is expected to report a rise in revenue and profit for the third quarter on Tuesday, helped by resilient sales
