Samsung, like Apple, feels sting of slowing global growth

Samsung Feels Apple's Pain as Technology Slowdown Hits Sales

Samsung Electronics on Tuesday said it expects its quarterly operating profit to fall almost 29 percent lower than the year-ago period, just one week after Apple rocked markets with its lower-than-expected revenue for the critical holiday sales period.

The South Korean company's operating income fell to 10.8 trillion won ($9.6 billion) in the period that ended in December, according to preliminary results released Tuesday, falling short of the 13.8 trillion-won average of analysts' estimates compiled by Bloomberg. This is down 38.5 percent from 15.1 trillion won posted a quarter earlier.

CNBC also reported that Samsung is expecting a revenue drop of about 11% to about 59 trillion won (~$52 billion) for one year ago.

Analysts blamed low worldwide demand for dynamic memory chips (DRAMs), 45 per cent of which are made by Samsung, and faltering economies in emerging markets.

LG held a 3 percent share of the global smartphone market in the second quarter of previous year, showed latest data from market tracker Counterpoint Research.

Shortly after Apple CEO Tim Cook warned employees and investors that the company's next quarterly financial results won't be rosy, Samsung followed suit with a similar warning of its own. Samsung it seems are starting to see the competition come at them hard with Huawei snapping at their heels in many markets and actually overtaking them in others.

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Samsung had a smashing 2018 performance with multiple record-breaking quarters, mostly thanks to a boom in memory chips demand. In late 2018 the DRAM market saw weaker demand and prices had begun to fall, as a class action lawsuit was issued against Samsung, Hynix, and Micron.

Samsung had seen record profits over the past year and a half thanks to a boom in smart devices around the world, but recent months have seen a major dropoff in smartphone demand.

It will reportedly roll out a new line-up of its flagship Galaxy handsets at next month's World Mobile Congress in Barcelona as it seeks to regain a competitive edge in a market segment it once dominated.

Samsung is also set to introduce the world's first bendable smartphone in the first half.

It also took another hit after the bribery conviction of Lee Jae-yong - the son and heir of the group's ailing current chairman Lee Kun-hee.

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