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Samsung's profit drops to its lowest level since the failure of Galaxy Note 7



The world's largest smartphone maker reported an operating profit of 6.2 trillion won ($ 5.3 billion) for the first quarter of Tuesday, compared with 15.6 trillion won ($ 13.4 billion) last year. The sale for three months ended in in March dropped 14% to 52.4 trillion won ($ 45 billion).

Sharing on Samsung fell about 1% in the morning trading in Seoul.

Samsung blames revenue losses on a thriving global smartphone market and slowing demand for memory chips. Operating profit for the latest quarter is the lowest since the mid-2016, when Samsung is dealing with the failure of the Galaxy Note 7. Millions of such devices should be remembered due to reports of exploding batteries.

The sad earnings report came a week after Samsung announced that it delayed the launch of its highly expected foldable smartphone. Some Galaxy Fold reviews have reported defective hinges and screens that broke after removing the protective film of Fold.

At a call on Tuesday's revenue, the company said it analyzed the Galaxy Folds returned by early inspectors, and found damage "due to force applied" on the display near the top and bottom side the hinge of the phone ̵

1; the area where the screen is protected less. The company said it was trying to fix the problem, but also appeared to move some of the blame on how the reviewers used the phone. "We need to provide and better communication with customers on how to use the Galaxy Fold," said Robert Yi, head of investor relations with Samsung Electronics, during earnings calls. An updated schedule of launches will be announced in the next few weeks, he added.

This is a recession for Samsung, which has worked to win back to consumer trust following Note 7's note. The company is also facing increased competition from Huawei's rival smartphone maker, set to launch the foldable phone in the coming months.

Losing the Galaxy Fold will not affect the current market position of Samsung because the foldables are "anywhere near the mass market adoption," says Kiranjeet Kaur, an analyst at the research firm IDC.

But "if Huawei's foldable smartphone produces a faultless look, this may be Samsung's image in the process," he added.

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In recent years, the huge demand for memory chips has led to Samsung to record revenues. The company warned Tuesday that it expects the general market for chips to stay slower in the next quarter.

But Samsung is looking at the next big computer chip cycle, which states last week that it will invest 133 trillion won ($ 114 billion) in non-memory chips. Switching can put Samsung at a better position in cash in the growing demand for chips that can power 5G devices, self-driving vehicles and devices that use artificial intelligence.


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