Samsung reports record Q2 results but smartphone sales slow

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Samsung reports record Q2 results but smartphone sales slow

Samsung’s Q2 results revealed record operating profit for a sixth straight quarter but investors remain concerned at slowing sales of its flagship smartphone device, the Galaxy S4.

The results come as analyst IDC reports Samsung's share of the smartphone market slipped to 30.4% in the second quarter, from 32.2% a year earlier.

Despite reporting a 50% jump in profits for the second quarter the results showed a decline in earnings from the first quarter in Samsung’s mobile phone business despite the launch of its new flagship model, the Galaxy S4.

Samsung Q2 results showed net income rising to 7.77 trillion Korean won (£4.5bn), from 5.19 trillion won (£3bn) a year earlier with sales rising to 57.46 trillion won (£33.5bn), from 47.6 trillion won (£27.8bn).

In a statement Samsung acknowledged the slowing pace of smartphone sales. It said: ‘The strong growth streak for the smartphone market is expected to continue in the third quarter, albeit at a slower pace.’

The results were broadly inline with the manufacturer’s earnings forecast earlier this month.

Analysts say smartphone sales are rising at the low end of the market and in emerging markets, with some predicting the manufacturer will up its efforts in this area as sales slow in the developed markets.

Markellos Diorinos, head of engagement management at mobile marketing expert Upstream said: ‘The fact that Samsung’s mobile division is down 3% quarter on quarter in a growing market is quite significant. Although Samsung has predicted slower growth for its smartphone shipments in Q3, this should not be seen as a predicator of its future success. In fact, it is still in good position to bolster its market share by focusing more on its devices that cater to emerging markets – where Samsung is currently the brand of choice. Samsung should and will continue to invest in its high-end phones, but the potential of its lower end devices needs to be realised.’

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