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Samsung warns profit to fall 60%

taipeitimes.com

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Re: Samsung warns profit to fall 60%

#11

Post by a_bonobo »

onlyrealcuzzo wrote: post #8
sanxiyn wrote: post #6

Comments here are out of their mind. Samsung's smartphone business hasn't been a profit center for quite some time. Majority of profit came from DRAM and NAND, and profit fall is directly attributable to recent price crash of both.

What caused a price crash of both DRAM and NAND??

There is more background in other articles on Samsung's prediction:

>Samsung said it received fewer orders from cloud service providers, such as Amazon, as well as from handset makers, such as Apple, which has recently seen a slowdown of its own smartphone sales. This low demand in the cloud services and smartphone markets for both DRAM and NAND flash chips have pushed the prices of these chips down.

>According to Bloomberg, data centers are still going through their unused memory chips right now, Apple has cut its forecasts for iPhone sales and China’s economy, which is Samsung’s largest market for embedded components, has also slowed down this year.

>According to IHS Markit, a research firm, the market for DRAM is set to reach $77 billion in sales this year, which is a drop of 22% compared to last year. In this last quarter, DRAM prices fell over 30% (38% for server DRAM), which is the “sharpest decline since 2011," according to TrendForce.

https://www.tomshardware.com/news/samsung-q1-2019-earnings-p...

Re: Samsung warns profit to fall 60%

#12

Post by axaxs »

sanxiyn wrote: post #7
axaxs wrote: post #5

Samsung's problems are just beginning. They're getting destroyed on every front, and basically all comes from China. On the phone front, they were used to selling phones at premium pricing only relying on their brand name. You don't have to look past Nokia or Blackberry to see how that will end. They're not really innovative, and while their devices are generally quality, they've pushed the price point too high. Xiao…

Samsung is undisputed leader in DRAM and NAND.

I appreciate the insight. I don't know anything about that business, and also realize that Samsung as a whole is a huge conglomerate with many things I don't track. Being chip based, I'm assuming they have increasing competition from China though, no?

Re: Samsung warns profit to fall 60%

#13

Post by zaphirplane »

forkLding wrote: post #4

Signals to the end of an era, smartphones have matured and are becoming ubiquitous like laptops. Moreover, the most profitable smartphones belong to Apple which held 86% of smartphone profits generated in the industry in 2018. Samsung was competing more in the mid to affordable segments so it was bound to start losing once others started catching up, especially since its Chinese competitors are basically giving up pr…

> Samsung was competing more in the mid to affordable

I assumed Samsung’s android phones were the top of the range. Who do you think is the high end android phone brand

Re: Samsung warns profit to fall 60%

#14

Post by blihp »

onlyrealcuzzo wrote: post #8
sanxiyn wrote: post #6

Comments here are out of their mind. Samsung's smartphone business hasn't been a profit center for quite some time. Majority of profit came from DRAM and NAND, and profit fall is directly attributable to recent price crash of both.

What caused a price crash of both DRAM and NAND??

At least part of the DRAM issue is related to Intel's CPU supply issues being a drag on new PC sales.[1] But overall for DRAM and NAND, it's probably a case of market saturation in many sectors.

[1] As well as AMD has been doing with Ryzen, most large computer purchasers are still Intel buyers and are slow to change.

Re: Samsung warns profit to fall 60%

#15

Post by skilled »

Been using a Huawei 3i phone for more than a month now. I literally could not tell if this was Huawei or Samsung if I was given this phone without prior knowledge.

Although, there are rumors that Huawei are working on their own OS. And it would be interesting to see whether they would also introduce an OS for their laptop series.

Re: Samsung warns profit to fall 60%

#16

Post by vvanders »

axaxs wrote: post #5

Samsung's problems are just beginning. They're getting destroyed on every front, and basically all comes from China. On the phone front, they were used to selling phones at premium pricing only relying on their brand name. You don't have to look past Nokia or Blackberry to see how that will end. They're not really innovative, and while their devices are generally quality, they've pushed the price point too high. Xiao…

It's somewhat ironic given that Samsung drove HTC out if the market by dropping millions in marketing dollars.

Re: Samsung warns profit to fall 60%

#17

Post by sanxiyn »

axaxs wrote: post #12
sanxiyn wrote: post #7

Earlier quoted context omitted.

Samsung is undisputed leader in DRAM and NAND.

I appreciate the insight. I don't know anything about that business, and also realize that Samsung as a whole is a huge conglomerate with many things I don't track. Being chip based, I'm assuming they have increasing competition from China though, no?

No. There actually has been a good news from China on DRAM recently. Fujian Jinhua, the leading Chinese DRAM competitor, is rumored to be exiting the business.

Re: Samsung warns profit to fall 60%

#18

Post by forkLding »

zaphirplane wrote: post #13
forkLding wrote: post #4

Signals to the end of an era, smartphones have matured and are becoming ubiquitous like laptops. Moreover, the most profitable smartphones belong to Apple which held 86% of smartphone profits generated in the industry in 2018. Samsung was competing more in the mid to affordable segments so it was bound to start losing once others started catching up, especially since its Chinese competitors are basically giving up pr…

> Samsung was competing more in the mid to affordable I assumed Samsung’s android phones were the top of the range. Who do you think is the high end android phone brand

Just comparing smartphones in general, not really Android vs IOS. Samsung was probably the top-range Android phones in terms of pricing.

Re: Samsung warns profit to fall 60%

#19

Post by caprese »

sanxiyn wrote: post #6

Comments here are out of their mind. Samsung's smartphone business hasn't been a profit center for quite some time. Majority of profit came from DRAM and NAND, and profit fall is directly attributable to recent price crash of both.

> Majority of profit came from DRAM and NAND, and profit fall is directly attributable to recent price crash of both.

finally

Re: Samsung warns profit to fall 60%

#20

Post by evancox100 »

forkLding wrote: post #4

Signals to the end of an era, smartphones have matured and are becoming ubiquitous like laptops. Moreover, the most profitable smartphones belong to Apple which held 86% of smartphone profits generated in the industry in 2018. Samsung was competing more in the mid to affordable segments so it was bound to start losing once others started catching up, especially since its Chinese competitors are basically giving up pr…

Convenient narrative, but it's likely that this has more to do with their component business (nand, DRAM, LCDs, etc.) than their smartphone business. Samsung overproduced a bunch of memory just as demand fell through the floor. [1]

Also, your article on Apple's smartphone profit share is from April 2018, so more like 2017 than 2018. Not sure how relevant that is to 2019 earnings.

[1] https://www.wsj.com/articles/samsung-hopes-strong-chip-sales...

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