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Samsung Profits Take a 60% Dip in Q1

Samsung will soon have its weakest quarterly profits since 2016

Samsung Profits Take a 60% Dip in Q1

Samsung Profits Take a 60% Dip in Q1

Samsung's business is getting hit hard in today's marketplace, with DRAM oversupply resulting in sharp price decreases while rising competition in the display market is hitting the company's bottom line. 

Even in the smartphone market, Samsung is under strain, with slumps in sales impacting several aspects of the business from displays to DRAM and even the company chip manufacturing foundry arm. 

In Q1 2019, Samsung has warned that their operating profit will drop by an estimated 60% when compared to Q1 2018, bringing the company to its lowest level of profitability in over two years. Low DRAM pricing is the primary cause of this change, but it cannot be denied that other market factors have had their impact. 

Recently, Samsung launched its Galaxy Fold smartphone, an innovative product which launches with a staggering $1,980 price tag, a price that is too high for the vast majority of consumers. Moving forward, Samsung hopes that the introduction of 5G will increase smartphone demand, though in the near term Samsung is set to suffer through several rough quarters. 

Samsung Profits Take a 60% Dip in Q1  

DRAM demand is unlikely to increase enough to bring Samsung back to the same levels of profitability anytime soon, though the introduction of new products such as self-driving vehicles and growing reliance on high-end cloud services will likely see DRAM demand significantly rise in the coming years. That said, DRAM pricing is unlikely to increase anytime soon. 

You can join the discussion on Samsung's Q1 profits decreasing by an estimated 60% on the OC3D Forums.  

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Most Recent Comments

05-04-2019, 08:39:44

Peace
Quote:
In Q1 2019, Samsung has warned that [...] when compared to Q1 2019
Small typo right there :P


To topic: Especially the Smartphone business was definitely foreseeable. There won't be many customers for the Galaxy Fold, even though you have to give Samsung credit for showing REAL innovation since a long time, although it's certainly not perfect and will have its issues, like with any new product/technology.
The S10 series was at least something new compared to the S8/S9 series, but still didn't meet expectations (battery life, fingerprint sensor speed, etc.)



I don't think 5G will make a huge impact in smartphone demand. It's just useless if you don't have the infrastructure surrounding you and since we can all observe the news about the 5G auction here in Germany, I don't have high hopes for good coverage anytime soon.
While I personally don't need higher internet speeds on my phone as I rarely download anything large while not being at home, I could imagine 5G being widely available once our CURRENT smartphones have dropped out of software support... But that's just my personal point of view. Like with 4K gaming which is now "available" for quite some time, but only recently has become practical/operabel/practicable.Quote

05-04-2019, 08:46:23

Warchild
Quote:
Originally Posted by Peace Ð View Post
Small typo right there :P


To topic: Especially the Smartphone business was definitely foreseeable. There won't be many customers for the Galaxy Fold, even though you have to give Samsung credit for showing REAL innovation since a long time, although it's certainly not perfect and will have its issues, like with any new product/technology.


I don't think 5G will make a huge impact in smartphone demand. It's just useless if you don't have the infrastructure surrounding you and since we can all observe the news about the 5G auction here in Germany, I don't have high hopes for good coverage anytime soon.
While I personally don't need higher internet speeds on my phone as I rarely download anything large while not being at home, I could imagine 5G being widely available once our CURRENT smartphones have dropped out of software support... But that's just my personal point of view. Like with 4K gaming which is now "available" for quite some time, but only recently has become practical/operabel/practicable.
Agree. But what you will also see like what is happening in Norway is the shutting down of the 3G network to reuse frequences and pave the way for 5G. Can't go into details but you also need to think about nbIoT (narrowband Iot). This will help push 5G deployment enough to make Smartphone companies act fast.

5G isn't just for smartphones, think of all the devices in your home, m2m machines, devices plugged into public transport or your own car. Turn you car into a mobile wifi hotspot allowing you to play games online from your laptop in the back seat etc.Quote

05-04-2019, 09:09:37

tgrech
Yeah another big change in use cases for 5G will come from the latency drop, it averages about 50ms for 4G here which was only a small step over 3G, while 5G aims for ~1ms in ideal scenarios so should be much more viable for remote realtime applications like vehicle or machine control & monitoring, portable online gaming/streaming, or remote desktop or similar, and arguably most importantly as AI scales to more complex tasks making cloud compute offloading from light portable devices with minimal edge processing much more suitable in a wider variety of applications.Quote

05-04-2019, 09:39:20

Warchild
Quote:
Originally Posted by tgrech View Post
Yeah another big change in use cases for 5G will come from the latency drop, it averages about 50ms for 4G here which was only a small step over 3G, while 5G aims for ~1ms in ideal scenarios so should be much more viable for remote realtime applications like vehicle or machine control & monitoring, portable online gaming/streaming, or remote desktop or similar, and arguably most importantly as AI scales to more complex tasks making cloud compute offloading from light portable devices with minimal edge processing much more suitable in a wider variety of applications.
Maybe an interesting thing for you. We got a world first

https://www.teliacompany.com/en/news...rst-5g-cinema/

This is what my company just achieved and what we are testing at the moment More big things to come but im wrapped under NDA.Quote

05-04-2019, 09:59:56

tgrech
Yeah very cool and definitely think that's the way things are going. The main thing holding back IoT devices atm is definitely the wireless networking side of things imo, edge processing gets less viable as the size and speed of data collected by sensors grows exponentially with potential applications and other tech improvements, yeah sure mobile processors are getting faster.. but at what cost? The economics of the datacentre will always win out over it when it comes to compute especially burst processing large amounts of data intermittently, and with heavy compute scenarios you can get a net power saving while reducing device weight & size besides being able to use a microcontroller often orders of magnitude cheaper. At the moment whenever I get a company asking which one to rely on with these bundle-of-sensors style IoT/monitoring systems it comes down to do you want minimal latency with limited compute resources, or practically infinite resources but with lag and unreliability, pretty much all practical use cases need a heavy mix of both for now to mitigate each others shortcomings (Of course edge processing for compression and stripping unimportant data before transmission will still always be useful, I think focussing on it for optimising cloud processing like that is key).Quote
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