- The Galaxy S10 is selling well, but demand for last year's flagships has declined more than before, due to the popularity of new mid-range Galaxy smartphones.
- The main problems are caused by falling demand for memory.
- Conclusions from the financial results of other divisions.
- The release date for the Galaxy Fold will be announced in a few weeks, probably in the second half of the year.
- Some predictions for the future
Formerly Samsung Electronics investors that this quarter is going to earn a lot less money, and now the company said in the first quarter. The semiconductor giant's profit fell two and a half times compared to the same period last year, from 15,64 trillion won (about $13,4 billion) to just 6,2 trillion won (about $5,3 billion).
It is worth noting that Samsung's total revenue for the reporting quarter at the same time amounted to 52,4 trillion won ($45,2 billion), that is, it decreased significantly compared to the first quarter of 2018, when the company's total revenue reached 60,6 trillion won ($52,2 billion). .XNUMX billion).
But unlike Google, the company doesn't blame its flagship smartphones for the loss - Samsung says the Galaxy S10 series is selling really well. During the quarter, the company was able to sell a total of 78 million phones and another 5 million tablets, and the less than impressive sales results for the quarter are due to the fact that mid-range and entry-level models eat up part of the sales of last year's flagship Galaxy models.
This makes sense, as much of Samsung's new strategy in the mobile market is to bring the latest features to mid-range handsets like the new A-series. Samsung also plans to sell slightly more phones in the second quarter of this year than it did in the reported first quarter. The revenues of the mobile division fell slightly, while profits fell 1,7 times. The company explains this by increased competition and a general decline in demand in the smartphone market.
However, the company explains its main problems in the field of declining profits mainly by the same factor as in the previous quarter: a drop in demand for memory chips, which bring the bulk of Samsung's income, inventory management, as well as a decrease in demand for displays. The company said the situation should improve in the second half of the year, with demand for flash storage for servers as well as smartphones with 256GB or more of storage on the rise. Already, the demand for high-capacity memory chips is growing due to flagship smartphones.
The company said that its semiconductor business showed revenue growth due to increased shipments of modems and processors for smartphones. The network business is doing well with the launch of 5G networks in Korea. The display panels division posted a slight loss due to declining demand for flexible screens and an increase in the market for large panel suppliers. At the same time, sales of high-end TVs (solutions with QLED panels and very large diagonals) allowed the Consumer Electronics Division to demonstrate growth.
In the current second quarter of the year, Samsung expects a limited improvement in the memory chip market, as demand is expected to improve in areas such as mobile electronics. However, prices will continue to decline at the same time. Demand for mobile processors and CMOS is on the rise, and Samsung expects more demand for conventional inflexible panels.
Samsung initially didn't mention its delayed Galaxy Fold foldable smartphone, but then responded to a reporter's request by saying it will announce an updated launch schedule in the next few weeks. It is possible that the cutting-edge device will hit the market in the second half of the year, depending on how you interpret the following excerpt in the press release:
“In the second half of the year, despite increased market competition, Samsung expects to increase smartphone sales with new models in all segments from the Galaxy A series to the Galaxy Note due to a seasonal increase in demand. In the flagship segment, the company will strengthen its leadership with the new Galaxy Note, as well as innovative products such as 5G solutions and foldable smartphones.”
More generally, the company predicts that increased demand for flexible screens could help its display business with unnamed new smartphones planned for release. However, the company also believes that demand for flexible displays may be rather weak at present. Now the company is betting on conventional screens.
Samsung believes that demand for memory chips will recover in the second half of the year, although some external uncertainty will remain. Competition is expected to intensify in the second half of the year in the developed markets of TVs and smartphones, which will create problems for the company - in response, the Korean manufacturer is going to focus on high-end devices.
In the medium to long term, Samsung aims to increase the competitiveness of key businesses through business diversification and innovation in device components and formats. Samsung also continues to expand its automotive technology capabilities with HARMAN and AI solutions.
In the reporting quarter, Samsung Electronics capital expenditures amounted to 4,5 trillion won ($3,9 billion), with 3,6 trillion won ($3,1 billion) the company invested in the development of semiconductor production and 0,3 trillion won ($0,26 billion) — in the production of screens.
Source: 3dnews.ru