Samsung profit is halved, company guidance warns

Samsung, the world’s largest smartphone and memory chip maker, warned the market its quarterly profit would drop by 56%, prior to the official result announcement later this month.

Samsung Electronics told the market that the operating profit generated in the quarter ending 30 June amounted to KRW 6.5 trillion ($5.55 billion), which would be a 4% sequential improvement on Q1 this year, but would represent a 56% drop from the same quarter a year ago. The total revenue is expected to be around KRW 56 trillion ($47.8 billion), a 7% sequential growth, but 4% year-on-year decline. The continued depressed profitability (operating margin almost unchanged from last quarter at 12%, compared with 25% a year ago) indicates Samsung’s main business has not turned the corner.

The semiconductor sector, where Samsung has generated the highest profit among all of its business units, remains weak. Last month investment analysts from the private fund Evercore reported that the inventory of memory chips by downstream device makers continued to be at excessively high level, therefore the investors did not see the sector recover before 2020.

The IT & Mobile communication unit, which has generated the highest revenue for Samsung, is still in trouble. Samsung has braced intensive competition particularly from the Chinese competitors, and its Galaxy S10 series have not been able to turn its fortune. The troubled launch of the Fold version of S10, which had been slated for Q2, has still yet to happen. A new Unpacked event has just been announced for August, but is likely to unveil its new tablet, the Galaxy Note 10, to consider the stylus featured on the event invitation.

When faced with pressure on profit, companies often turn to control cost. That looks to be what Samsung has been doing. A few days ago The Economic Times of India reported that Samsung will cut 1,000 jobs from the company’s smartphone functions. This is after 150 jobs are already gone in Samsung’s telecom infrastructure team.

Samsung dropped in the deep-end for Aussie smartphone lies

The Australian Competition and Consumer Commission has opened up legal proceedings against Samsung suggesting it made false, misleading and deceptive claims over water resistance.

The claim from Samsung is a relatively simple one; S10 devices are IP68 water resistance, meaning the devices are good for up to 1.5 metres for a period of 30 minutes. Advertising for the S10 also depict a number of different scenarios from swimming pools to the beach, suggesting the device performs effectively in different environments.

The ACCC believes Samsung did not test or know of testing to substantiate these claims, and therefore mislead Australian consumers through more than 300 advertisements.

“The ACCC alleges Samsung’s advertisements falsely and misleadingly represented Galaxy phones would be suitable for use in, or for exposure to, all types of water, including in ocean water and swimming pools, and would not be affected by such exposure to water for the life of the phone, when this was not the case,” said ACCC Chair Rod Sims.

“Samsung itself has acknowledged that water resistance is an important factor influencing Australian consumer decisions when they choose what mobile phone to purchase.

“Samsung’s advertisements, we believe, denied consumers an informed choice and gave Samsung an unfair competitive advantage. Samsung showed the Galaxy phones used in situations they shouldn’t be to attract customers.”

Samsung Pool

Interestingly enough, Samsung seems to have dug itself into a whole with this one. Despite suggesting to the consumer on billboards, social media and TV advertising, a statement on its website confirms the images are misleading:

not advised for beach or pool use.

Interestingly enough, phones which had been advertised as water resistant were sold at a higher price. This is all well and good is you fancy taking your phone into the bath but don’t plan on living any form of Australian stereotype; no beaches and no pools for Samsung users.

Unfortunately for those who believe the advertising and don’t have the eagle eyes to spot small print on websites, Samsung also denied warranty claims for phones which were damaged when used in water.

Despite the fact Samsung has clearly misled consumers about the performance of S10 devices in non-fresh water, the firm is standing by its marketing and plans to fight the case. This is a slightly tricky area however, as there is some flexibility build into advertising rules. No-one expects to get a burger which matches the images on McDonald’s adverts, but this exaggeration is accepted.

Samsung might be able to squeeze out of this situation and consumers might continue to be lied to. That said, people should be able to put their phone down for a couple of minutes if they fancy a dip.

Samsung surfboard

DT, Carphone Warehouse and Elisa show their 5G FOMO

The 5G hard launches are coming thick and fast, which is causing fear of missing out for some in the telecoms game.

Today’s big announcement comes from Vodafone UK, on which more from us later. BT has also got involved and now Deutsche Telekom, Carphone Warehouse and Elisa have all rushed out press releases to make sure nobody thinks they’re off the pace.

DT hasn’t hard launched anything yet, but has chosen to detail at considerable length how profound its plans to do so are. Today’s announcement is the start of DT’s 5G network rollout in Germany. Berlin and Bonn will be first, followed by Darmstadt, Hamburg, Leipzig, and Munich and by the end of 2020 DT expects Germany’s 20 largest cities to be 5Ged up.

“We punched our ticket for a 5G future with the spectrum auction,” said Dirk Wössner, MD of Telekom Deutschland. “Our goal now is to get 5G to the streets, to our customers, as quickly as possible. Nearly three-quarters of our antenna locations in Germany are connected with optical fiber – we’re now building on that… At the same time, we need a clear regulatory framework and pragmatism from the authorities – particularly when it comes to questions regarding regional spectrum, local roaming, allocation of the auction proceeds, and the approval procedures – which takes far too long in Germany.”

Despite not having activated 5G anywhere yet DT is generously offering its subscribers to pay for it anyway. You can shell out €900 for a Samsung Galaxy S10 5G as well as a 5G tariff and when DT gets its act together you can be among the first people to get access to its 5G. “Telekom is 5G ready and offers the first 5G devices with suitable rate plans for everyone who wants to be there from the start,” said Michael Hagspihl, MD for Consumers at Telekom Deutschland.

In the UK Carphone Warehouse has joined the 5G pre-order party by announcing the availability of a few 5G smartphones. The ubiquitous Samsung Galaxy S10 5G will cost you £1099 SIM-free and is available today. We’re told the Oppo Reno 5G is also available today but you can’t can’t get it online for some reason. The Xiaomi Mi MIX 3, OnePlus 7 Pro 5G and LG V50 ThinQ will all be available for pre-order tomorrow.

“Retailing the largest range of the newly announced 5G compatible phones means those looking to upgrade to the new offering will have the biggest choice in terms of device and networks to best suit their needs across an impressive range of smartphones, deals and trade-in offers,” said John Coleman, Director of Connectivity at Carphone Warehouse.

Lastly Finnish operator Elisa is proud to announce it was the seller of the first 5G phone bought in any Nordic country. The lucky punter was one Harri Hellström, who strolled into Elisa Kulma in Helsinki unaware of how his life was about to change. Moments later, amid streamers and rapturous applause, Hellström was handed his phone by Elisa CEO Veli-Matti Mattila and held aloft by exuberant Elisa staff.

“I have always been into cutting-edge technology, and I have often been among the first to buy new devices,” said Hellström, once he had composed himself. “I feel wonderful about having the first 5G phone in the Nordic countries. I travel a lot in Finland and abroad, and I often rely on my mobile device for communication on the road. This is why fast connections are essential.” Words so fitting they could almost have been written by Elisa itself.

“Demand for 5G devices and subscriptions will increase as network coverage expands,” said Antti Ihanainen, VP of Elisa’s consumer subscription business. “5G will revolutionise the way we use mobile devices beyond anything we have seen during previous technological evolutions. Fully utilising the benefits of a 5G network requires the use of 5G devices, which means demand will inevitably rise. We are continuously developing innovative 5G services and exploring ways of utilising 5G technology.”

As more operators around the world activate 5G networks and get to bang on about how much better life is for their subscribers as a consequence, the FOMO for those operators that have yet to get involved will increase. If those subscribers start openly wondering what the fuss is all about once they start using 5G, however, being late to the game might not be such a bad thing.

SK Telecom talks 6G with Ericsson, Nokia and Samsung

South Korean operator SK Telecom is hoping to take the lead in the development of 5G towards 6G in partnership with most of the big kit vendors.

Specifically SKT has signed those memorandum of understanding things with each of Ericsson, Nokia and Samsung Electronics. The mutual understanding reached between SKT and the vendors is that they promise to cooperate with each other when it comes to research and development of 5G and 6G technologies.

The 5G stuff is as expected: ultra-reliable and low-latency communications, enhanced MIMO, millimetre wave and standalone 5G. Despite banging on about 6G in the press release, SKT didn’t feel confident enough to specifiy the nature of the 6G R&D, just committing to draft technical requirements and new business models for the next generation of mobile tech.

“Through strengthened cooperation with Ericsson, Nokia and Samsung Electronics, SK Telecom will be able to secure the world’s best 5G quality and lead the way towards 6G mobile network communications,” said Park Jin-hyo, Chief Technology Officer and Head of ICT R&D Center of SK Telecom.

Conspicuously absent from this happy band are Huawei and ZTE. South Korea, of course, has long had a complicated relationship with China, but with the current trade tensions between the US and China currently focusing on Huawei as a proxy, many US allies are moving to distance themselves from it and ZTE just to make sure they stay out of trouble. With Huawei making it clear it’s investing heavily in technological autonomy, there is a real possibility of 6G R&D becoming balkanised.

Samsung is already planning for 6G leadership – report

Samsung has reportedly announced the formation of the Advanced Communications Research Centre, which will have the mission of creating a 6G leadership position for Samsung.

5G is barely with us and we’re already talking about 6G. This should come as little surprise, such is the length of time it will take to bring the technology to fruition. According to the Korea Herald, Samsung has begun it’s 6G mission as part of the wider Samsung Research business unit.

A currently un-named official announced the news, stating “the current team on telecommunications technology standards has been expanded to start leading research on the 6G network.”

What 6G actually is remains to be seen, but such are the rewards in leading each generation of mobile technology, it would appear it is never too early to cast an eye on the horizon.

Unfortunately for Samsung, it is not the first to the party. In January, LG Electronics and KAIST announced a joint 6G Research Centre in Daejeon. LG has said it wants to use the research centre to pre-emptively secure technology for 6G.

Work has already started for 6G standards. In March, a small group of scientists gathered in Levi, Finland, to host one of the first global summits on the 6G Wireless standard. This was not the most of complex of meetings, though it was aiming to start work on the most important questions; why does the world need 6G?

The answer is relatively simple for the moment; we don’t know.

The technological and business case for 6G will emerge eventually as 5G gains more traction around the world. As with 5G in the 4G era, forward-thinking engineers predicted the demand for increased speed, more efficient spectrum use and efficiencies to drive profitability. 5G does of course offer more, but you only need a framework to build on to start with.

This is what the initial 6G forays will be based upon, but it is important to understand what the short-comings of 5G are. The problem needs to be understood before a solution can be crafted, otherwise, what’s the point?

Apple poised to enter the foldy-phone fray

A patent for a new foldable phone has emerged in the United States Patent and Trademark Office, signalling Apple’s entry into the desperate battle for innovation.

Filed on March 28, the document describes an electronic device with ‘bendable or flexible layers’ to move towards creating a new form-factor for the iLeader. Although Apple has been relatively quiet in the foldable arena to date, it wasn’t going to be too long before the smartphone giant made some noise.

While this innovation might have appeared to be a flash-in-the-pan, the idea of a foldable device will keep imaginative engineers busy. The smartphone industry has been crying out for innovation for years, and while the initial introduction of foldable devices might have been a flop, there is certainly potential in the long-run.

Although the underlying theme of Mobile World Congress this year was the gradual movement towards 5G, devices always seem to wrestle some attention in the headlines. The return of Nokia devices snatched it in 2017, while a Matrix style device caught attention last year, but it was foldable devices in Barcelona this February.

samsung foldable phone

Samsung was the first to start talking about the concept last summer, while Huawei certainly attempted to steal some of the thunder. However, it was Samsung who won the race at Mobile World Congress, though the devices have failed to live up to expectations. Reviewers for a host of different media titles reported faults with the devices, leading to numerous delays and recalls. The official release date was supposed to be May, before being pushed back to June, and now it seems there might be further delays with no concrete date in sight.

And while Samsung is facing engineering difficulties, Huawei’s are much more troublesome. A major disruption to its global supply chain, owed to the White House, puts the prospects of many devices in question, most notably due to Google putting its relationship with Huawei on pause.

The foldable devices segment has seemingly ground to a halt, fading from the headlines after claiming its 15 minutes of fame.

And then Apple makes its debut on the folding stage.

If we were being honest with ourselves, this was always going to be nothing more than a minor set back for foldable devices. The smartphone segment has been searching for innovation, with the last genuine disruption coming back in the noughties when Apple ditched the keyboard. A lack of buttons might have disturbed consumers at the beginning, but who would go back to that era now?

The same will be said about foldable phones. Once they enter the market, consumers will find reason to like them. Whether it is multi-taskers on the tube, gamers with more real estate to enjoy, or watching movies on a wider screen. There are usecases now, and new ones will emerge in the coming years. The devices might not intrigue everyone, but there will be a place in the technology.

It also gives smartphone manufacturers a reason to ask consumers to spend more money. Right now, consumers are being asked to spend extortionate amounts on incremental upgrades. Demand has gone down, we have seen this in the smartphone shipment figures each quarter, and the refurbished devices market is growing steadily. Consumers are sick of taking out second mortgages for much the same.

And when Apple decides to showcase its own device, you can pretty much guarantee there will be queues around the corner.

Line at Apple store

Apple is the master of creating and cultivating a brand identity and loyalty amongst its customers. Some might say the closed ecosystem is forced loyalty, but many Apple customers life and breathe the brand. There are a few faltering at the moment, you can see that through Apple’s sliding market share, but they may well be brought back by genuine innovation.

However, what is worth noting is that Apple does make excellent products. It would be unfair to credit all of its success to the marketing department; the engineers do chip in as well.

Most of the time the specs are market leading and the reviews are some of the highest around. Apple’s engineers live through a culture of perfection, dating back to the leadership of Steve Jobs, which is represented through the price of the products and the loyalty of the customers.

One of the issues which all manufacturers will face is the thickness of the phone. Smartphones are increasingly becoming sleek devices, incredibly light and not that intrusive. Foldable devices which we have seen so far certainly do not fit this description. Such is the challenge of doubling the size of the screen, and the power demands which accompany this real estate, these devices are bulky. It might turn off some consumers.

LG has come up with an interesting concept, somewhat of a halfway house, with its latest device, the V50ThinQ 5G. The smartphone can be plugged into a separate module, which includes a second screen. This product effectively has the same advantages of a foldable screen, double the screen space, but the phone can be taken out of the module for everyday use. It isn’t the full-blown promise, but it is an interesting addition.

fznor

Another minor irk for some reviewing the devices is that they are not completely flat. Even when fully extended, there is still a slight bend in the screen. This is really nit-picking, as it won’t impact experience that much, but hyper-techno-enthusiasts will pick on this minor ‘flaw’ in the devices.

Price is another consideration; can Apple create a product which is friendly enough to the wallet? Apple customers are of course used to paying a premium, but foldable devices could take this to a new extreme. Huawei’s first foldable device was priced at $2,600 while Samsung’s was $1,920. Apple is traditionally more expensive than these two, but that would surely be too much to ask of customers.

The second-wave of foldable devices are likely to be cheaper, and soon enough economics of scale in the manufacturing facilities will kick-in. But whether smartphone manufacturers are pricing themselves out of the market remains to be seen with future launches.

Finally, the durability of the devices needs to be questioned. Smartphones are already delicate pieces of kit, just look at the number of cracked screens which are being carried around today, and introducing a fold introduces another weakness for the clumsy and drunken to take advantage of.

These are a challenges Apple engineers will have to consider if it wants to woo its followers back into line.

That is not to say Apple customers blindly follow however. Not only have you got some switching to more price-friendly alternatives, you have to remember how long it took the Apple Watch product line to gain traction. Even now some might say this is a product line which is struggling to live up to the promise.

But Apple is Apple…

If anyone can crack the foldable devices market, Apple would certainly be a sensible bet.

Huawei holds onto number two smartphone spot… for the moment

Huawei has held onto the number two spot for smartphone shipments during the first quarter of 2019, but storm clouds are gathering on the horizon.

According to estimates from Gartner, Samsung is leading the smartphone manufacturers owning 19.2% of market share over the first three months, though Huawei is closing the gap with 15.7%. All three Chinese brands in the top five grew market share over the period, with Apple also declining to 11.9%, shrinking in the Huawei shadow.

Brand Q1 2019 market share Q1 2019 shipments Q1 2018 market share Q1 2018 shipments
Samsung 19.2% 71.6 million 20.5% 78.5 million
Huawei 15.7% 58.4 million 10.5% 40.4 million
Apple 11.9% 44.5 million 14.1% 54 million
Oppo 7.9% 29.6 million 7.3% 28.1 million
Vivo 7.3% 27.3 million 6.1% 23.2 million
Others 37.9% 141.4 million 41.5% 159 million

This might look very promising for the under-fire Chinese vendor, but it does seem the joy might be short-lived. While European and Asian governments are keen not to ban the vendor from selling smartphones or infrastructure equipment in their markets, they might not be able to stem consumer fears.

The anti-China rhetoric might not be anywhere near the same levels as in the US, but consumers will not be keen to invest in a substandard product. This might be the case moving forward, should Huawei remain on the ‘Entity List’, effectively banning it from working with any US firms, including Google.

The prospect of an Android-less Huawei device, and a home-grown operating system to replace it, has been much discussed, but soon enough the reality will hit home with consumers. Without support for popular Google-owned applications, experience will soon drop. Huawei might be able to provide a suitably effective alternative, but not being able to access Google’s apps and services will turn off some consumers.

One of the issues Huawei will face is that of the unknown. Huawei’s OS might be perfectly good, but no-one knows. It might have the supporting ecosystem, but no-one knows. It might be able to create apps to rival Google offerings, but no-one knows. Asking cash-conscious consumers to spend so much on so many unknowns will be a very difficult task.

This might not have an impact on Huawei’s biggest market, China, where the firm controls around 29% market share for smartphones, but Europeans are Google obsessed. This is Huawei’s second biggest region, representing 69% year-on-year growth for the first quarter, and one which represents more opportunity for growth. The US friction could put a severe dent in the consumer unit’s ambitions.

For Apple, it seems its traditional business is becoming increasingly competitive. There will of course be several reasons for this, namely a lack of innovation in recent years and extortionate prices, but there might be a glimmer of hope on the horizon.

As it stands, the misery is likely to continue over the next couple of months. With 5G phones hitting the shelves, early adopters may well snub their loyalties to experience the connectivity euphoria. Apple will not release a 5G-compatible device until 2020, but by missing out on the first wave it will learn the pitfalls of rival launches.

The second-wave of devices, Apple will be a front-runner in this one, will likely be where we see the greatest progress. The bugs and shortfalls will be identified and corrected, and there might well be some applications to make use of the data headroom which is created through 5G. There will also be more attractive tariffs available, with prices driven down by competition. These factors will push 5G into greater market adoption.

It might also recapture the loyalties of faltering iLifers…

Winning in the market share rankings today is certainly something to shout about, however success needs to be maintained over the next 12-18 months. Once 5G is pushed out to the mass market, there will be plenty of opportunities to sell extortionately priced devices. Apple appear to be aiming at this second-phase of 5G devices, building with the consumer hype, while Huawei will have to navigate the stormy seas.

If US tension forces Huawei devices out of consumer hands before the 5G device refreshment cycle, it might just miss out on the bigger prize.

Samsung confirms UK launch-date for Galaxy S10 5G

Although it is easy to get lost in the 5G hype, this is an important announcement to take note of; Samsung’s 5G device will be available in the UK from June 7.

According to the latest statistics from Strategy Analytics, Apple is leading the smartphone market share rankings, while Samsung sits in second place. The duo has created a clear gap between everyone else, collecting just over 60% of all smartphone shipments over the final quarter of 2018.

Samsung and Apple are the two most trusted and popular brands in the UK. There might be other 5G smartphone buzz floating through the news, but Samsung has the weight of credibility in the eyes of the UK consumer; people might start paying much more attention to 5G now.

“The Galaxy S10 5G unlocks an entirely new mobile experience to prepare consumers for a world of possibilities: a larger 6.7-inch Dynamic amoled display; a new 3D Depth Camera with Live focus video; and the biggest battery available in the Galaxy S range, the Galaxy S10 5G is a visionary, ultra-premium device for those looking to stay ahead of the curve,” said Kate Beaumont, Director of Innovation, Technology and Services at Samsung.

Featuring enhanced display, upgraded camera features and an improved 4,500mAh3 battery, the traditional play on hardware is present to justify the price, though tribute has been paid towards the usecases of tomorrow. A 3D depth sensor has been introduced for the benefit of augmented reality.

Pricing for the handset has not been released just yet, though customers will be able to pre-order through Samsung experience stores from May 22. The devices will also be made available through EE and Vodafone, the later of which has confirmed the launch of its 5G network on July 3. EE is yet to announce a date to launch its own 5G network, though we suspect the Vodafone news will spur some activity before too long.

Although much of the 5G news will appear as somewhat of a blur for consumers in many markets, this Samsung announcement could cut through the noise. Apple and Samsung hold very trusted positions in the UK and also have the marketing budgets to make an impact. With Apple not launching its own 5G device until 2020, and other available devices having little credibility in the eyes of the consumer, Samsung could make the 5G euphoria real.

What is worth noting is that initial experiences are unlikely to meet the lofty expectations. The device might not be up to scratch, nothing is perfect first time around, while the coverage offered by EE and Vodafone will be incredibly limited. During the first phase of the launch, nine cities will be covered by both of the operators, though this will not be city-wide coverage. The likely scenario is going to be small pockets of busy traffic and transport hubs.

We’ve been waiting for quite a while and now it seems 5G is finally becoming real.

Apple drives global smartwatch market up 48% in Q1

The latest global smartwatch shipment numbers from Counterpoint Research reveal strong segment growth driven largely by Apple.

The fruity gadget giant accounts for over a third of the market, so when its shipments increase by 49% year-on-year it’s not surprising to see the whole market grow in line with that. Intriguingly Apple’s biggest smartphone competitors seem to be getting their act together in this smartwatch renaissance. Both Samsung and Huawei gained overall market share as you can see in the chart below.

counterpoint smartwatch q1 19

“Apple Watch shipments grew a solid 49% YoY despite the weak demand for its iPhones,” said Satyajit Sinhaof Counterpoint. “Apple continues to focus on the health-related features like ECG and fall detection in the Apple Watch Series 4. The ECG capability in the Apple Watch is the most desirable feature, according to our latest Consumer Lens survey. Apple has now received approval on its ECG features from healthcare authorities of Hong Kong and 19 other countries including France, Germany, Italy, Spain, and the UK.

“The heart rate sensor for health monitoring, GPS and pedometer sensors for fitness, and NFC embedded for payment are some of the key integrated technologies. Related use-cases and in addition to notifications with cellular capability are driving the smartwatch adoption. However, limited battery life remains a pain point for consumer’s decision-making process, irrespective of region and price band.”

“Samsung grew exponentially at 127% YoY as the Korean brand’s market share jumped to 11% in Q1 2019,” said Sujeong Lim of Counterpoint. “Its success was due to the latest Galaxy watch series which came with better battery life as well as a very traditional round clockface design. Further, it provides cellular LTE connectivity which gives it an edge over others targeting Android-based smartphone users. It is a great alternative to the Apple Watch for Android and Samsung’s huge installed base of users.

“Huawei’s market share jumped to 3% in Q1 2019 due to good traction for its latest Huawei Watch GT. The striking design, affordability, leveraging the growing ‘Huawei’ brand mindshare, and the smartphone user base is driving demand. Further, Huawei has shifted focus to sell more Huawei branded smartwatches whereas the smart bands are selling well under its Honor brand.”

So it looks like the big smartphone brands have finally worked out how to persuade their customers to buy smartwatches too, presumably helped by actually finding some useful functions for them. It’s still hard to see this as anything other than a fairly niche category for fitness nuts and hypochondriacs though and it will probably remain so until the voice and gesture UIs become so useful that it becomes viable to leave your smartphone at home.

Samsung’s profit crashes on weak semiconductor sales

Samsung Electronics reported a net profit decline of 57% in Q1, with total revenue going down by 14%. The semiconductor unit suffered the worst.

Samsung’s quarterly revenue went down from KRW60.56 trillion ($52 billion) a year ago to KRW52.39 ($45 billion) in Q1. The gross margin level came down from 47.3% to 37.5%. The operating profit dropped to KRW6.23 trillion ($5.3 billion) from KRW15.64 trillion ($13 billion), a decline of 60.2%. The net profit came down by 57% to KRW5.04 trillion ($4.4 billion).

 Samsung 2019_1Q_income

On business unit level, Device Solutions reported a 27% drop in revenue, the sharpest decline among all the business units. Inside the unit, Memory chips declined by 34%. Samsung attributed the weakness to “inventory adjustments at major customers”, indicating its customers including other smartphone makers, have been selling slower than expected.

IT & Mobile Communications, Samsung’s largest business unit by sales, the business was more stable. Revenue from the handset business dropped by 4% from a year ago, but grew sequentially by 17%. Samsung saw strong demand for its Galaxy S10 products, but the de-focus of mid-range and lower products limited the volume growth. The recent debacle of S10 fold, high profile as it may be, should not have had any material impact on Q1 as it was scheduled to launch in Q2. Samsung’s network business, though small in comparison to its competitors, reported a strong revenue growth of 62% to reach KRW1.28 trillion ($1.1 billion), benefiting from the “accelerating commercialization of 5G in Korea”.

Samsung 2019_1Q_BU

Samsung gave cautious lift to its outlook for Q2 but more optimistic with the second half of the year. It foresees the memory chip market stabilising in Q2 and stronger growth in the second half due to seasonality and product line refreshing. On the mobile side, Samsung sees growth in shipment in Q2 thanks to continued demand for the S10 products and positive market response to its new mid-range A series. It sees the 5G products and the fold form-factor making material contribution in the second half.