SAMSUNG MAY BE SHOWING OFF A SLEW OF TECH at CES, but things aren't so rosy behind the scenes as Samsung Electronics expects to post a 28.7 per cent drop in quarterly operating profits thanks to slumping demand for memory chips and smartphones.
With an estimated operating profit of some $9.6bn, Samsung isn't exactly going broke, but it was expected to make a good dollop more moolah.
But the slowdown comes from downward sloping demand for Samsung-made semiconductors, with shipments of memory chips slowing off in Samsung's fourth quarter financials.
With the slowdown in demand comes a slump in pricing, which Samsung expects to continue in the first quarter of its new financial year.
Such chip slumps can happen from time to time, but for the past couple of years, Samsung has been enjoying surging shipments which saw it become the world's largest semiconductor flogger.
Poor chip sales are one thing, but Samsung has also reported slowing smartphones sales as another culprit to its downgraded profits warning.
As phones like the Galaxy S8 are still pretty bloody good, with the Galaxy S9 more an upgrade than a generational shift, it's not a massive surprise that Sammy isn't selling as many phones as it has done in the past. The Note 9, for example, is very nice indeed but not exactly a major shift from the Note 8.
And with strong competition in the market from Google, Apple and one-time underdog OnePlus, as well as the likes of Huawei and Xiaomi, Samsung needs refreshed phone line up that really captures the attention of the market.
With foldable phones on the horizon and the Galaxy S10 supposedly just around the corner, perhaps Samsung can pull some eye-catching tech out of the bag to get people rushing out to buy its phones or upgrade from existing Galaxy handsets.
Samsung is also getting stuck into 5G, which looks to be finally ready to make a proper debut, and it still makes a load of OLED display panels for its products and those of others. So the South Korean electronics giant has plenty of scope to make profits elsewhere. µ
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