01/30/2020
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01/30/2020
The world’s number one smartphone, the South Korean Samsung Electronics, announced on Thursday a decrease in its profit in the fourth quarter. He attributed it to weakening demand for its flagship products and lower prices for the chips it makes.
Net profit for the last three months of the year fell to 5,230 billion won (4.3 billion francs), 38% lower than the previous year. That for the whole year fell by 51% to 21,740 billion won (17.9 billion francs).
“Fourth-quarter profits were down from a year earlier due to continued memory chip price declines and weak screens,” Samsung Electronics said in a statement. The company is the flagship of the Samsung Group conglomerate, by far the largest and best known of those who dominate the industry in the world’s 12th economy.
Samsung Electronics pointed to “continuing uncertainties in the global economy”. The industrialist was like his compatriots victim of two trade conflicts, that between the United States and China, which threw a cold on the world exchanges, and that between South Korea and Japan, due to old disputes on the history of the Second World War. Tokyo has imposed drastic restrictions on sales to the South Korean giants.
Another concern: his vice-president but de facto leader, Lee Jae-yong, is on trial in a vast corruption case which risks sending him back to prison.
Foldable smartphones
But he said he was confident about his cellphone business. Particularly because in 2020 “demand for 5G devices should go up, while competition in performance should intensify”.
The brand wants to “strive to improve profit compared to the previous year by strengthening the 5G range, offering a new foldable design, etc., as well as boosting sales through an improvement in the competitiveness of our low and medium range. “
Global demand for 5G phones already exceeded expectations in 2019, the year the technology debuted, with nearly 19 million devices according to Strategy Analytics. Of this total, Samsung ranked number two in the world, with 36% market share, against 37% for Huawei, which benefits from its dominant position in China.
In semiconductors demand must “remain solid thanks to that of data centers”.
ats, dpa
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