Samsung Profits Take a 60% Dip in Q1

Samsung Profits Take a 60% Dip in Q1

Samsung Profits Take a 60% Dip in Q1

Samsung’s business is getting hit hard in today’s marketplace, with DRAM oversupply resulting in sharp price decreases while rising competition in the display market is hitting the company’s bottom line. 

Even in the smartphone market, Samsung is under strain, with slumps in sales impacting several aspects of the business from displays to DRAM and even the company chip manufacturing foundry arm. 

In Q1 2019, Samsung has warned that their operating profit will drop by an estimated 60% when compared to Q1 2018, bringing the company to its lowest level of profitability in over two years. Low DRAM pricing is the primary cause of this change, but it cannot be denied that other market factors have had their impact. 

Recently, Samsung launched its Galaxy Fold smartphone, an innovative product which launches with a staggering $1,980 price tag, a price that is too high for the vast majority of consumers. Moving forward, Samsung hopes that the introduction of 5G will increase smartphone demand, though in the near term Samsung is set to suffer through several rough quarters. 

Samsung Profits Take a 60% Dip in Q1  

DRAM demand is unlikely to increase enough to bring Samsung back to the same levels of profitability anytime soon, though the introduction of new products such as self-driving vehicles and growing reliance on high-end cloud services will likely see DRAM demand significantly rise in the coming years. That said, DRAM pricing is unlikely to increase anytime soon. 

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