Like every year, Samsung reports its Q1 profits at the end of April, and ahead of that, the company has revealed that it is likely to face 60 per cent of the decline in its quarterly profits compared to the previous year. The company has reported that the decline in the profits is due to the rapid decrease in the sales of memory chips and its display products.
Noticeably, the 2018’s Q1 operating profit was reported to be 15.64 trillion South Korean won, which now has fallen to 6.2 trillion won for this year’s Q1 operating profits. According to Samsung, it had already expected a 14 per cent decline in its operating profits for the first quarter of 2019, which was estimated to be around 13.2 trillion South Korean won.
In the past year, the memory chips prices dropped by a surprising rate, and the company too had stated that price drops were “larger than expected.” This report of the operating profits indicates the Q1 2019 profits will be the lowest since the third quarter of 2016 (due to the worldwide recall of it’s over exploding batteries of Galaxy Note 7 in 2016). In past few years, Samsung has been getting hints on the slowing down of the growth of the company, and even the company is aware of that, as the analysts’ reports has been revealing the continuous decrease in the sales of Samsung products.
Samsung though is trying hard to compete with the biggest tech giants like Apple, the main source of its profits has always been the mid-range products. Also, its semiconductor division has been the greatest contributor to its high revenues. So it may be the time when the company should focus on its loyal customers, and the mid-tier products to secure that additional revenue.
But according to the analysts, this decline in the profits will remain for a bit longer, especially in the memory chip division. The price of the memory chips may decrease up to 20 per cent in the coming future, and then in Q2, the semiconductor division may see even lower profits.,
Yashica is a Software Engineer turned Content Writer, who loves to write on social causes and expertise in writing technical stuff. She loves to watch movies and explore new places. She believes that you need to live once before you die. So experimenting with her life and career choices, she is trying to live her life to the fullest.