Samsung has just announced catastrophic results in the fourth quarter of 2018, the South Korean group recorded a 38% decline in sales. The reason ? Competition from the Chinese smartphone manufacturers and the decline in demand for chips.
As announced by Samsung, the figures for the last quarter of 2018 are not very good. It will be recalled, however, that this is still a difficult period for the South Korean manufacturer. Samsung generally has better results in the second and third quarter.
In a short press release, Samsung announced that it had generated an operating profit of 10.8 trillion won, down 10 percent from the previous quarter, but also from the same period in 2017. Same story for sales, down 38% from Q3 2018, and 28% year-on-year. This is the first time in the space of two years that Samsung is recording such a sudden drop.
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According to the latest IDC and Strategy Analytics report, the Korean still retains more than 20% of the smartphone market share. Nevertheless, the commercial failure of the Galaxy S9 and the mixed reception of the Galaxy Note 9, led to a sharp decline in sales of high end smartphones. Same story on the mid-range segment, which is suffering a lot of competition from Chinese brands.
Faced with this decline in sales, Huawei took the opportunity to take the lead. After overtaking Apple in 2018, Huawei hopes to dethrone Samsung in 2019. To stand up to its rival, the number 1 can rely on the Galaxy S10, its new high-end, very different from its predecessors, and the Galaxy X foldable smartphone.
Samsung has also decided to blast its mid-range smartphones with innovations formerly reserved for high-end, such as large batteries, a triple/quadruple photo sensor or the fingerprint scanner under the screen.
The mobile division of Samsung is not alone concerned by this downward trend. Analysts also point to the fall in demand for DRAM memory chips, anticipated for several months by the firm. On this side, the situation should not improve in 2019.