Samsung Electronics has projected its first profit decline in seven quarters as the strong performance of its chip business was dented by slowing sales of its premium smartphones and display panels. 

Analysts said Samsung’s flagship Galaxy S9 smartphone, which was launched in mid-March, posted the lowest sales of any flagship model since its Galaxy S3 phone, with the expected shipments of just 31m units this year due to the lack of significant innovation. 

Samsung is still the world’s largest smartphone maker, controlling more than a fifth of the global market. But its market leadership has come under pressure as Chinese rivals such as Xiaomi lure consumers with more affordable smartphones. 

The poor performance of the Galaxy S9 weighed on Samsung’s second-quarter earnings, analysts said. The South Korean company estimated its operating profit at Won14.8tn ($13.2bn) for the April-June quarter, up 5.2 per cent from a year earlier but down 5.4 per cent from the record Won15.6tn in the previous quarter. Second-quarter sales were estimated at Won58tn, down 4.9 per cent from a year earlier. 

Samsung’s shares have fallen nearly 10 per cent so far this year amid concerns that its earnings may have peaked, but analysts expect its profits to rebound in the second half as demand for memory chips remain strong and sales of smartphones and OLED (organic light emitting diode) panels are likely to increase with new model launches.

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