Samsung Electronics said on Tuesday that its fourth-quarter earnings likely decreased sharply due to lackluster demand in its memory chip business as well growing competition in the smartphone segment.
South Korean tech giant predicted operating profit for the three months ended December was approximately 10.8 trillion Korean won ($9.67 billion) — or 28.71 percent down from a year ago. The figure missed market expectations, coming in 18.18 percent less than the 13.2 trillion won that analysts had predicted.
Consolidated sales for the fourth-quarter is predicted to be around 59 trillion won, lower than the 62.8 trillion won analysts predicted in a Reuters poll, and 10.57 percent down from a year ago.
The chipmaker said weaker-than-expected demand for memory chips from data-center customers led to a decline in shipments and a notable drop in memory chip prices.
For its smartphone business in a “stagnant and fiercely competitive market,” marketing expenses and flat sales volumes led to a decline in profitability, the company said. Over the third quarter of 2018, Samsung saw more than 13 percent year-over-year decline in global smartphone shipments, according to International Data Corporation.
Samsung shares were volatile on that news, trading between positive and negative territory in the morning.
Analysts have said that smartphones from various companies have become so similar in their features and functionality, that customers no longer see tangible differences — the devices are not as innovative as they used to be. The prediction is that a new generation of high-speed mobile internet could shake things up for the industry.
from Viral News Reports http://bit.ly/2H16eyx
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