The newest earnings report from Samsung on Wednesday suggests a serious industrywide slowdown in smartphone sales.
The South Korean electronics giant reported a 20 percent jump in revenue and a 58 percent rise in operating profits as it benefited from strong demand for its memory chips, which are used in everything from phones to servers. Samsung also got a boost from its flagship smartphones, which hit the market in mid-March.
However, a new report from Bloomberg notes that the Seoul-based company also said that revenue from its display unit was “affected by slow demand for flexible OLED panels.”
While Apple prefers to rely upon multiple suppliers for the large majority of iPhone components, the iPhone X’s flexible OLED display is sourced from Samsung exclusively. In turn, if Samsung is claiming that they’ve seen slower than anticipated demand for said displays, it stands to reason that iPhone X sales may truly be as tepid as analysts have been claiming.
“Apple’s iPhone X shipments have actually been pretty bad, so everyone is looking to the next model cycle,” said Sanjeev Rana, a Korea technology analyst at CLSA.
Of its own phones, Samsung said “[p]rofitability in the mobile business is expected to decline quarter-over-quarter due to stagnant sales of flagship models amid weak demand and an increase in marketing expenses to address the situation.”
Nonetheless, Samsung is confident that things will pick up — although it’s likely to take until the 2018 next-gen iPhones for this to happen. “For the second half [of the year], OLED panels in the smartphone industry are expected to see a rebound in demand, especially as demand for flexible panels remains strong in the high-end segment,” Samsung noted in its report.
