Samsung has problems as big as those of the Apple company at the moment, the Koreans announcing that sales are far below expectations, and that they are going to announce a serious decrease in profit. If in Q3 2018 Samsung registered a record profit through its divisions, in Q4 2018 things look completely different, because the receipts and profit decrease, and the divisions where the biggest problems are registered are the mobile and the one that produces memory chips.
Samsung announced today that it recorded revenues of 52.5 billion dollars in Q4 2018, 11% less than in the same period last year, so around 5 billion dollars disappeared completely. In the case of profit, Samsung announced that it recorded 9.6 billion dollars, 29% less than in the same period of last year, here being the biggest drop for Koreans, but we will see something similar at Apple.
Samsung continues to have declining revenues and profits
Samsung surprised analysts with its announcements, all of them expecting increases in revenue and profit compared to Q4 2017, but the lack of interest in memory chips and competition on the smartphone market affected the company's evolution. Not even in the previous fiscal quarter did Samsung have more success with the mobile division, and although in Q4 2018 they invested more in promotion, it seems that the products are not good enough to attract customers.
The South Korean giant says its fourth-quarter operating profit will tumble 29 percent compared to a year earlier, to a worse-than-expected 10.8 trillion won ($9.7 billion). Just last week, Apple boss Tim Cook rattled markets by lowering the iPhone-maker's quarterly sales forecast, blaming cooler Chinese demand. Meanwhile, a supply glut is squeezing prices for memory chips, Samsung's key profit driver.
Samsung is going through a period as bad as the one Apple is going through, and this is mainly due to poor sales in China, but also due to the very high competition from the manufacturers there. Neither of the two companies managed to correctly guess what people who buy smartphones want, but in 2019 both Samsung and Apple announced major news for phones, so they will probably return to growth.
