Samsung will see a significant drop in profits for Q1 2019
It appears that the slowing demand for smartphones has impacted Samsung’s profit expectations. Samsung has reported that it will be seeing significantly lower profits in Q1 2019 than expected, with a massive year-on-year drop in profit.
Samsung’s business revolve around the smartphone industry as a whole. They make their own phones, but they also supply parts for other manufacturers as well. Apple, Xiaomi and reportedly HUAWEI are now using Samsung’s AMOLED panels, which is part of the reason why a slow day for other smartphone manufacturers would also impact Samsung indirectly.
Then there is also the fact that RAM prices have dived significantly. Samsung is one of the three major DRAM manufacturers, and lowered market prices would also translate to reduced profit for them. As DRAM is used in everything from PCs to even routers, it does represent a pretty significant revenue stream for them as well.
However, don’t worry about Samsung going into the red. Samsung is set to announce an operating profit of around 6.2 trillion KRW (~RM22.29 billion). Year-on-year, we are seeing a sizeable 60% drop though as Samsung posted 15.24 trillion KRW (~RM56.23 billion) in profits for Q1 2018.
Pokdepinion: Is this literally, their loss, our win? I mean, we are seeing more affordable devices, more RAM… So what if Samsung sees less profits?