Samsung saw strong demand for the Galaxy S10 while LG needs its upcoming 5G V50 ThinQ to be successful
The global smartphone market has slowed down for over a year now, but Samsung went strong in the first quarter of 2019 on the back of the recently launched Samsung Galaxy S10 series, that witnessed “solid sales.” The company recently announced its earnings for Q1 and reported to making a profit of 2.27 trillion won (~1.95 billion) through smartphone sales. Despite a loss in the display panel and semiconductor arms of its business, the South Korean giant registered an overall revenue of 52.4 trillion won (~$45 billion) and a profit of 6.2 trillion won (~$5.4 billion) due to the high demand of 5G telecom equipment and home entertainment devices besides the Galaxy S10 smartphones.
Reportedly, the demand for the latest Samsung flagship i.e. Galaxy S10 series was 16% higher in the first week of its sale compared to the last year’s Galaxy S9 duo. This is expected to be linked with an iconic new design and elements such as the hole-punch displays and under-display ultrasonic fingerprint scanner.
However, Samsung’s overall profit declined 40% compared to the first quarter of 2018 due to intense competition from brands like Xiaomi, Vivo, OPPO etc. in the entry-level and the mid-range segments. Samsung recently realigned its priorities and announced a more aggressively priced Galaxy M series in India besides merging the Galaxy J series into the Galaxy A series for a diverse mid-range catalog. These revisions should allow Samsung to make up to the stiff competition from its Chinese rivals.
LG mired in losses, expects redemption via 5G
At the same time, LG also posted its earnings for the first quarter of 2019, reporting an operating profit of 900 billion won (~$0.8 billion) with its home appliances and air solutions unit generating the maximum profit. The smartphone unit, however, continued to be in loss for the fifteenth consecutive quarter, sliding 12% in revenue compared to Q4 of 2018. With sales worth 1.51 trillion won (~$1.3 billion), LG reported an overall loss of almost $180 million.
In spite of this slowdown, LG echoed its earlier expectations of bouncing back from hard times with the success of 5G devices like the upcoming LG V50 ThinQ. The company also said that relocating its manufacturing unit from Korea to Vietnam shall further “improve profitability and LG’s global competitiveness” in this quarter.
However, an indefinite delay in the previously proposed launch of the LG V50 ThinQ makes us a bit skeptical about the company’s hopes to finally make a profit this quarter. We’ll wait until its next earnings call to see how these claims fare.
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