Samsung Electronics

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Samsung sees Q1 profit plummet 60%

Samsung’s Q1 earnings are in and, as the company itself predicted, they don’t make for pretty reading.

The Korean giant saw revenue for the three-month period fall by 13 percent year-on-year to 52.4 trillion KRW, around $45 billion. Meanwhile, operating profit for Q1 2019 came in at 6.2 trillion KRW, that’s a whopping $5.33 billion but it represents a decline of huge 60 percent drop from the same period last year. Ouch.

Samsung’s Q1 last year was admittedly a blockbuster quarter, but these are massive declines.

What’s going on?

Samsung said that sales of its new Galaxy S10 smartphone were “solid” but it admitted that its memory chip and display businesses, so often the most lucrative units for the company, didn’t perform well and “weighed down” the company’s results overall. Despite those apparent S10 sales, the mobile division saw income drop “as competition intensified.” Meanwhile, the display business posted a loss “due to decreased demand for flexible displays and increasing market supplies for large displays.”

That’s all about on par with what analysts were expecting following that overly-optimistic Q1 earnings forecast made earlier this month.

The immediate future doesn’t look terribly rosy, too.

Samsung said the overall memory market will likely remain slow in Q2 although DRAM demand is expected to recover somewhat. It isn’t expecting too much to change for its display business, either, although “demand for flexible smartphone OLED panels is expected to rebound” which is where the company plans to place particular focus.

On the consumer side, where most readers know Samsung’s business better, Samsung expects to see improved sales in Q2, where buying is higher. It also teased a new Note, 5G devices — which will likely limited to Korea, we suspect — and that foldable phone.

The Galaxy Fold has been delayed after some journalists found issues with their review units — TechCrunch’s own Brian Heater was fine; he even enjoyed using it. There’s no specific mention in the quarterly report of a new launch date but it looks like the release will be mid-June, that’s assuming what AT&T is telling customers is accurate. But we’ll need to wait a few weeks for that to be confirmed, it seems.

Samsung says it will announce a revised launch date for the Galaxy Fold in the next few weeks.
Executives are speaking on a 1Q earnings conference call.

— Tim Culpan (@tculpan) April 30, 2019

Samsung’s new Galaxy M smartphones will launch in India first

Samsung will launch its new lower-priced Galaxy M series in India before the smartphones roll out globally. Asim Warsi, senior vice president of Samsung India’s smartphone business, told Reuters that three devices will be available through its website and Amazon India at the end of January and are intended to help the company double online sales.

Samsung is currently trying to recover its lead in India, the world’s second-largest smartphone market behind China, after losing it to Xiaomi at the end of 2017, when Xiaomi’s sales in India overtook Samsung for the first time, according to data from both Canalys and Counterpoint.

Xiaomi’s budget Redmi series gave it an advantage since Samsung had a dearth of competitors in the same price bracket, but analysts noted the Korean electronics giant maintains an edge in terms of R&D and supply chain expertise. Samsung leaned into those strengths last year, opening what it describes as the world’s largest mobile phone factory in Noida, just outside of New Delhi.

Specs about the three Galaxy M smartphones emerged last month, with details appearing on platform benchmark Geekbench about devices called M10, M20 and M30, the latter of which may be powered by an Exynos 7885 chip with 4GB ram.

Warsi told Reuters that “the M series has been built around and incepted around Indian millennial consumers.” The price range of Indian-first smartphones will be from less than 10,000 rupees (about $142) to 20,000 rupees. TechCrunch has emailed Samsung for more information about the new phones.

The company will debut the latest version of its flagship smartphone, the Galaxy S10, in San Francisco on Feb. 20.

Samsung acquires network analytics startup Zhilabs to help its transition to 5G

Samsung Electronics is betting that acquiring Zhilabs, a real-time networks analytics startup based in Barcelona, will ease its transition from 4G to 5G technologies. Financial details of the deal, which was announced today, have not been disclosed. Zhilabs will be fully owned by Samsung, but it will continue to operate independently under its own management.

The acquisition of Zhilabs is part of Samsung’s initiative, announced in August, to invest 25 trillion won (about $22 billion) in businesses working on AI, 5G, components for self-driving vehicles, and biopharmaceutical technologies.

In a statement, Youngky Kim, Samsung Electronic’s president and head of networks business, said “5G will enable unprecedented services attributed to the generation of exponential data traffic, for which automated and intelligent network analytics tools are vital. The acquisition of Zhilabs will help Samsung meet these demands to assure each subscriber receives the best possible service.”

Founded in 2008, Zhilabs’ products are used by customers including Hewlett Packard Enterprise, Vodafone, and Telefonica to analyze and test network performance in real-time. Because its solutions allow service issues to be automatically detected and fixed, Zhilabs’ AI-based automation will help Samsung launch new services related to the industrial Internet of Things and smart cars.

Samsung forecasts a strong quarter on the same day its CEO resigns citing “unprecedented crisis”

 This post has been updated to reflect the announcement of Oh-Hyun Kwon’s resignation.   Samsung Electronics made two announcements today that contrasted starkly with one another in tone. First, it issued an optimistic third-quarter earnings guidance. Then, a few hours later, it posted a resignation letter from chief executive officer and vice chairman Oh-Hyun Kwon, who said it is time… Read More

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Samsung posts record quarterly profit despite scandals

 Despite being slammed by scandals, Samsung just recorded a record quarter of business with a net profit of $9.9 billion for Q2 2017. The Korea firm has been rocked by the recall of the Galaxy Note 7 and the prosecution of de facto leader Jay Y. Lee on bribery charges, but that didn’t stop it from pulling in revenue of $54.8 billion during the three-month period. That revenue figure rose… Read More

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