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a sharp drop in profits and good sales of Galaxy S10



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  • Galaxy S10 sold very well, but the demand for last year's flagships decreased stronger than before, due to the popularity of the new Galaxy smartphone middle class.
  • The main problems are due to a fall in demand for memory.
  • Findings from the financial results of other units.
  • Galaxy Fold release date will be on the & # 39; revealed a few weeks later – probably in the second half.
  • Some predictions for the future

Earlier, Samsung Electronics has warned investors that this quarter is going to earn a lot less money, and now the company has reported its financial results for the first quarter. Profit semiconductor giant fell in two and a half times compared with the same period last year – to 15.64 trillion won (about $ 13.4 billion) to a total 6.2 trillion won (about $ 5.3 billion).

It should be noted that the general Samsung revenues for the quarter thus amounted to 52.4 trillion won ($ 45.2 billion), that is very significantly decreased compared to the first quarter of 2018, when total revenue reached 60.6 trillion won ( $ 52, 2 billion).

But unlike from Google, the company does not blame the loss in their flagship smartphones – Samsung says the Galaxy S10 series is really good sale. During the quarter, the company was able to implement a total of 78 million phones and 5 million tablets, not very impressive sales results for the quarter due to the fact that the model of secondary and primary level & # 39; yadayuts part of last year's sales of the flagship Galaxy models.

This is logical, since to a large extent the new Samsung strategy in the mobile market is to offer the latest features in the machines of the middle class like the new series A. The Samsung also plans to sell in the second quarter of this year, a little more phones than in the first quarter of the reporting. mobile division revenues declined slightly, while profits fell by 1.7 times. The company explains this increase in competition and a general decline in demand in the smartphone market.

However, their main problems in the area explains the decrease in company profits primarily by the same factor as in the last quarter: a fall in demand for memory chips that bring basic information about the & # 39; the amount of revenue the Samsung, inventory management, as well as a decrease in the display demand. The company said that the situation should improve in the second half of the year, with the growth in demand for flash memory for servers as well as smartphones with a 256-GB drive, and more. Already, demand for capacious memory chips is growing at the expense of flagship smartphones.

The company said its semiconductor business showed a revenue growth by increasing the supply of modems and processors for smartphones. Network business feels good due to launch 5G networks in Korea. Unit engaged in production of panels for displays, showed small losses due to lower demand for flexible displays and an increase in the market of suppliers of large panels. While sales of high-end TVs (QLED solutions with panels and with a very large diagonal) enabled consumer electronics division to show growth.

In the current, second quarter of the year, the Samsung expects limited improvement on the memory chip market, as demand is expected to improve in areas such as mobile electronics. However, at the same time continue to decline in prices. Demand for mobile processors and CMOS grows, Samsung also expects an increase in demand of conventional rigid panels.

Initially, Samsung has not mentioned its delayed foldable smartphone Galaxy Fold, but then responded to the request of journalists, stating that the report updated schedule for launch in the next few weeks. Perhaps the best device will hit the market in the second half of the year, depending on how you interpret the following passage in the press release:

"In the second half of the year, despite increased market competition, the Samsung It expects an increase in sales of smartphones with new models in all segments of the Galaxy series A to the Galaxy Note due to the seasonal increase in demand. The flagship solutions segment, the company will strengthen its leadership thanks to the new Galaxy NoteAs well as innovative products such as 5GSmartphone-solutions and complex. "

In more general terms, the company expects that the increased demand for flexible screens could help her business through displays planned for release by an unnamed new smartphone. However, the company also believes that demand flexible displays can be currently quite weak. The company now relies on conventional screens.

Samsung believes that in the second half of the year demand for memory chips will be restored, although some external uncertainties will remain. It is expected that in the second half of the year will increase competition in the developed markets of TVs and smartphones, which will create problems for the company – in response to the Korean manufacturer is going to focus on high-end devices.

In the medium to long term, Samsung aims to increase the competitiveness of key areas by diversifying destinations and the introduction of innovations in the field of components and the size of the equipment. Samsung also continues to expand its capabilities in the field of automotive technology using HARMAN solutions and applying the I-solutions.

During the quarter, capital expenditures Samsung Electronics accounted for 4.5 trillion won ($ 3.9 billion), and 3.6 trillion won ($ 3.1 billion), the company has invested in the development of semiconductor production and 0.3 trillion won ($ 0, 26 billion) – in the manufacture of screens.

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