Samsung sales slide as EMEA channel inventory stacks up

Devices giant reports weakening demand on tablets and smartphones

Weakening demand for smartphones and tablets has hit both Samsung's top and bottom line in Q2, as the devices giant reports high channel inventory in EMEA.

For the three months to 30 June, the Korean firm's net profit fell 20 per cent annually to 6.25tn KRW (£3.6bn) on sales which slumped nine per cent to 52.35tn KRW over the same period.

Its IT and mobile business (IM) was hardest hit last quarter as sales fell 19.9 per cent annually to 28.45tn KRW, while its devices solutions arm's revenue dropped off 4.8 per cent over the same period to 16.23tn KRW. Its consumer electronics arm was the only unit to enjoy growth, with sales up 1.72 per cent to 13tn KRW.

The firm said demand "remained solid" in the US arm of its IM business but pointed to "high channel inventory levels" in EMEA which it claimed prompted lower sales of both smartphones and tablets in the region.

Over the last week, IDC claimed a flurry of smaller devices players are coming after the big boys such as Samsung and Apple in both the smartphone and tablet markets.

More than 12 vendors could work their way into the top-five firms in the smartphone market, the analyst said, pointing to declining market share at the Korean firm in Q2.

But Samsung remained optimistic for its second-half outlook and said it expects both tablet and smartphone shipments to grow due to strong seasonality and new product launches.