Considering Samsung’s reported guidance for the upcoming quarter, things aren't looking too good for the Tech giant. According to Samsung, the revenue for the quarter will reach $44.87-$46.63 billion, which is a 15 % decrease from last year!
The company reported an operating profit of about $ 13.76 billion in the first quarter of 2018, which is bound to fall by an astonishing 60 percent for the current business quarter, which reported by Bloomberg would be the worst slump in four years.
The forecasted operating profit of KRW 6.1-6.3 trillion (about $5.5 billion) for the first quarter of 2019 represents a steep drop of about 43 % in last year’s profit for the previous quarter.
Although there aren't any details about the reasons for such predictions but the profits last year can be attributed to the successful consumer handset business and extremely strong demand for memory chips. But good times don’t always last long. The last quarter of 2018 saw a decrease in the demand for chips and a downturn in the expected profits.
It seems the company was well aware of the future because it tried to downplay the impressive results of the first quarter of 2018. The words “slowing growth” were said seven times during Samsung’s announcement, attributing it to the retarding growth in the Smartphone industry and the company’s display panel business.
According to analysts, people are now buying phones less due to numerous reasons. And Apple's multi-device approach is one of the consequences. Apple Multi devices top of the range models are placed well beyond $1000 mark. This also appears to be a consequence of its falling revenues. Retarding growth requires tech giants to acquire more in the form of revenues from loyal customers to increase Average Selling Price (ASP).
Samsung may be ready to change its top end approach since it's been in the playfield with mid-tier companies for a long time now. Let's wait for the full earnings reports for Q1 to find out!