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Samsung warns profit to fall 60%

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Re: Samsung warns profit to fall 60%

#71

Post by viraptor »

oblio wrote: post #61
AceJohnny2 wrote: post #59

Earlier quoted context omitted.

> Because when the iPhone came out it was very expensive but significantly ahead of competition. From a CPU perspective, they still are: https://www.anandtech.com/show/13392/the-iphone-xs-xs-max-re... (for the rest of the features, that's indeed debatable) Fun fact: Samsung made the chip for the first iPhone. Steve Jobs was so dissatisfied with the experience that Apple bought PA Semi to design the chips in-house.

The thing is, that CPU bit is not really relevant for the average consumer, anymore. Flagship phone CPUs have been good enough for web browsing and casual app use for about 2 years. Not that I'm against extra horse power, we'll find a use for it. But we're in "desktop land", almost, for smartphone CPUs. They're good enough. The real smartphone battles now are in camera quality, gaming oomph and battery usage.

> Flagship phone CPUs have been good enough for web browsing and casual app use for about 2 years.

I think it's been longer. I'm on a non-flagship from last year, watching YouTube in PiP mode while writing this comment. Way more than necessary power for causing use.

Re: Samsung warns profit to fall 60%

#72

Post by tooltalk »

AceJohnny2 wrote: post #59
malux85 wrote: post #56

Earlier quoted context omitted.

Because when the iPhone came out it was very expensive but significantly ahead of competition. People paid for it, even people who couldn’t afford it found a way to pay for an iPhone The huge cash burst into Apple meant everyone was scrambling to deal with them. Then economies of scale, negotiating leverage with third parties and sheer momentum propelled them

> Because when the iPhone came out it was very expensive but significantly ahead of competition. From a CPU perspective, they still are: https://www.anandtech.com/show/13392/the-iphone-xs-xs-max-re... (for the rest of the features, that's indeed debatable) Fun fact: Samsung made the chip for the first iPhone. Steve Jobs was so dissatisfied with the experience that Apple bought PA Semi to design the chips in-house.

>Fun fact: Samsung made the chip for the first iPhone. Steve Jobs was so dissatisfied with the experience that Apple bought PA Semi to design the chips in-house.

I thought PA Semi's specialty was in power management and many didn't consider the acquisition a success as most key figures left the company not too long after the acquisition. Are you sure that Apple actually designed the SOC in-house? Wasn't it Intrinsity, Samsung's collaborator, that co-developed Samsung's Hummingbird core (also used in Apple's A4) to compete with Qualcomm's APs and go beyond the 1Ghz barrier, changed the game?

I always thought the Hummingbird was the breakthrough that made the A chips competitive -- Apple bought Intrinsity afterward.

Re: Samsung warns profit to fall 60%

#73

Post by Redoubts »

foobar1962 wrote: post #55
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.

I just had a conversation with somebody who asserted that Apple was bad (proprietary etc) and Samsung was good, and that Apple was 3rd phone maker behind Samsung and Huawei. He may be right about Apple being 3rd, but Apple looks to be the only one making a decent profit from their phones. How do they manage that when they have to pay for both hardware and software development, when all the others get the software for…

> when all the others get the software for free?

Because it shows.

Re: Samsung warns profit to fall 60%

#74

Post by tooltalk »

graton wrote: post #38
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.

Even with the price crash the prices are still higher than 2016. I purchased memory in 2016 and the price now is still about 30% higher than 2016.

Yes, there was a major DRAM market crash in 2016 and it wouldn't probably make good sense to use that as a proper baseline.

Re: Samsung warns profit to fall 60%

#75

Post by jayalpha »

foobar1962 wrote: post #55
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.

I just had a conversation with somebody who asserted that Apple was bad (proprietary etc) and Samsung was good, and that Apple was 3rd phone maker behind Samsung and Huawei. He may be right about Apple being 3rd, but Apple looks to be the only one making a decent profit from their phones. How do they manage that when they have to pay for both hardware and software development, when all the others get the software for…

"How do they manage that when they have to pay for both hardware and software development, when all the others get the software for free? "

Content and Apps. Apple takes a nice bite.

Samsung sells a commodity. Then people use the Google Play store and google makes money. I guess Samsung dreams of it's own phone OS. Was it LG or Samsung who bought WebOS?

Re: Samsung warns profit to fall 60%

#76

Post by Krasnol »

anthony_doan wrote: post #64
foobar1962 wrote: post #55

Earlier quoted context omitted.

I just had a conversation with somebody who asserted that Apple was bad (proprietary etc) and Samsung was good, and that Apple was 3rd phone maker behind Samsung and Huawei. He may be right about Apple being 3rd, but Apple looks to be the only one making a decent profit from their phones. How do they manage that when they have to pay for both hardware and software development, when all the others get the software for…

> How do they manage that when they have to pay for both hardware and software development, when all the others get the software for free? It's their ecosystem, all their hardwares work very well between each other. You have Apple messenger on a macbook connecting to your iphone. For android you need to download pushbullet. I'm not in the ecosystem I prefer Android but I can see why people such as consumer would cont…

> For android you need to download pushbullet.

TIL people are still sending SMS from their PC...

I'd say most of us will either use the Signal client or web.whatsapp.com without bothering connecting the actual devices together.

Re: Samsung warns profit to fall 60%

#77

Post by tonyedgecombe »

on_and_off wrote: post #66
foobar1962 wrote: post #55

Earlier quoted context omitted.

I just had a conversation with somebody who asserted that Apple was bad (proprietary etc) and Samsung was good, and that Apple was 3rd phone maker behind Samsung and Huawei. He may be right about Apple being 3rd, but Apple looks to be the only one making a decent profit from their phones. How do they manage that when they have to pay for both hardware and software development, when all the others get the software for…

I am of 2 minds about this. On one hand, smartphones are more or less commodities now. Most established smartphone makers can make great phones (at this point I only compare cameras and even then, they also to all be great) so it is only natural that margins become pretty thin. But right now they are just too thin and the ecosystem is not really healthy. We don't really need another Apple making huge margins on its s…

>We don't really need another Apple making huge margins on its smartphone business though.

I think I'd argue we need another two or three. Monocultures are almost never a good idea in the long term.

Re: Samsung warns profit to fall 60%

#78

Post by tooltalk »

evancox100 wrote: post #20
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/sams…

Absolutely I agree that AppleInsider's nonsensical fanboi narrative has no place.

This is all part of business cycle that went a bit berserk in 2016 when Samsung decided to increase their capex significantly to boost their capacity to capture greater marketshare in spite of the obvious resulting glut. Yes, consumers benefitted from plummeting prices, but most DRAM makers had to cut capex and capacity to deal with the DRAM glut and plummeting prices in 2016. The lower capex and capacity likewise eventually led to the price hike of 2017-2018 that we just witnessed. During this rise, the DRAM market participants again started expanding and we are seeing prices falling again. Barring unseen major technical breakthrough or extraordinary market demand (no, I don't mean Apple's market share or profit margin, fanbois), this cycle would continue...

Re: Samsung warns profit to fall 60%

#79

Post by tjoff »

dragosmocrii wrote: post #58
tyingq wrote: post #2

Moore is less, I guess? People holding on to older phones longer.

Why should I upgrade my Huawei P9 I got in 2016, when it works perfectly fine* and has the adequate power to run everything smoothly. * I did change the battery twice though. Too bad it's not as easy as taking the back cover as on a Nexus One...

Well, because of the hassle the answer is that most would just get a new phone.

Re: Samsung warns profit to fall 60%

#80

Post by tooltalk »

ehsankia wrote: post #29
evancox100 wrote: post #20

Earlier quoted context omitted.

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/sams…

What about the fact that the Chinese manufacturers are taking over the Asian and European market, over Samsung and Apple who are both losing market share? They might not be making as much money, as they run much tighter profit markets, but they are basically taking over the market by undercutting the competition.

>What about the fact that the Chinese manufacturers are taking over the Asian and European market

Two independent industries. Those Chinese manufacturers still have to use memory products made by either Samsung, Hynix or Micron. It does not matter which smartphone OEMs make more profit or has greater marketshare. Those three DRAM makers combined account for 90% of global DRAM supplies. China is not going to have its own domestic (major) DRAM manufacturer anytime soon.

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