Samsung. The Korean company has very big problems at the moment, announcing last night a dramatic drop in profit for Q2 2019, as it had predicted would happen, just a few weeks ago. According to those from Samsung, the company's profit fell by 56%, to 5.6 billion dollars, or about half of what Apple did in Q2 2019, with revenues falling by 4% to 47.5 billion dollars.
Samsung. The biggest problem for the Korean company lies in the fact that both demand and prices for memory modules have dropped significantly, affecting the division that generates a good part of the revenues. Although towards the end of Q2 2019 the sales of memory modules and other chips recovered a little, those from Samsung failed to overcome the substantial decrease recorded in the previous months, so they lost quite a lot of money.
Samsung. BIG PROBLEMS because of Phones, Chips
Samsung. Interestingly, although the company's mobile phone division generated 8% higher revenue, profit fell 42% compared to Q2 2018, a huge discrepancy for the company. Samsung has stated that phone sales have increased, but we are talking more than likely about the very cheap ones since the profit fell by 42%, suggesting that there are still very big problems for the mobile division of the company.
“Weakness and price declines in the memory chip market persisted as the effects of inventory adjustments by major data center customers from prior quarters continued despite a limited recovery in demand. The mobile division saw stronger shipments on new mass-market models, but was generally weighed down by slower sales of flagship models and increased marketing spend.”
Samsung. The company also stated that the trade war between the US and China could affect its revenues and profit in Q3 2019, Huawei reducing the purchases of components. To the same extent, those from Apple reduced the purchases of screens, and Samsung was left with a substantial decrease in profit for the fiscal quarter that ended at the beginning of this month, with no signs of recovery.
Samsung. Hopes for recovery now go to the future foldable phone, but also to the Samsung GALAXY NOTE 10, but also to iPhone 11, which should generate growth for the division that produces OLED screens.
