Samsung has now released its latest earnings report, and things aren’t looking rosy.
Profits for Samsung were down 56% compared to this time in 2018, marking a worrying slow in sales across its various electronics branches. Memory chips, specifically, have taken a hit, with slowing demand for high-end smartphones hitting Samsung double as a smartphone-maker and a supplier of parts to their main competitor, Apple’s iPhone range.
While Samsung TVs still vastly outsell the competition – as the largest seller of TVs worldwide – the market is flooding with mid-range models increasingly able to deliver premium formats, 4K resolution, and HDR panels.
Samsung specifically cites the “intensifying price competition”, as well as “unfavorable foreign exchange rates [and] increasingly protective global trade practices”, likely referring to the ongoing trade war between the US and China.
$5.6 billion operating profit isn’t shabby, of course – it’s certainly better than being in the red. But if the trend continues, it could spell trouble for one the world’s biggest technology companies.
And, on the TV front, at least, Samsung is hoping 8K TVs can help prop up its 2019 profits, if the company manages to convince consumers that 8K is now a ‘mainstream’ proposition.
Save us, 8K!
One of the more curious suggestions in the earnings report is that Samsung can push its 8K TVs to help bounce back on profits – and all within 2019.
The profit margins on premium televisions tend to be bigger, though it’s unclear how Samsung would cause a shift in buyer behavior here. 8K is still a fringe technology, largely for TV companies to flex muscles at each other while regular consumers continue to get their heads around 4K.
“Conditions in the TV market are expected to stay largely unchanged in the second half of 2019,” said the report. “Samsung plans to maximize end-year sales through close cooperation with retail partners and cementing the 8K leadership by positioning QLED 8K TVs as mainstream TVs.”
One thing to consider is that Samsung is also backing its own QLED horse, while swathes of other manufacturers make the switch from LED to OLED screens for their premium sets. While Samsung remains the market leader, it’s also an outlier in this, and it’s unclear whether consumers will end up choosing in Samsung’s or someone else’s favor in the long run.