Samsung Electronics’s quarterly profit more than halved after a global industry downturn and trade tensions slowed the demand for its chips and smartphones.
The company's earnings guidance for the second quarter of 2019 includes the following info:
- Consolidated Sales: Approximately 56 trillion Korean won
- Consolidated Operating Profit: Approximately 6.5 trillion Korean won
- Sales: 55 ~ 57 trillion Korean won
- Operating Profit: 6.4 ~ 6.6 trillion Korean won
However, the 56% fall in operating income was not as deep as it was initially expected, helped by an unspecified one-time gain from a customer. The company won’t provide net income or break out divisional performance until it discloses final results toward the end of the month.
Samsung is the world’s biggest producer of smartphone screens, semiconductors and mobile phones. Its memory chips remain a barometer for everything from computers to smartphones and have been one of the hardest-hit components since Trump administration tariffs took effect in May. This week, Japan slapped export restrictions on materials needed for display and chip production, potentially hammering also rival SK Hynix Inc.
Micron Technology Inc., the largest U.S. maker of computer memory chips, said last week it intended to “meaningfully” reduce its spending in its fiscal year 2020, on top of plans to idle 5% of production of memory chips in the last quarter.
In the second quarter, contract prices for 32-gigabyte DRAM server modules fell 19.3% compared to the previous quarter while those for 128 gigabit MLC NAND flash memory chips skidded 5%, according to inSpectrum Tech Inc. DRAM price drops are projected to widen to up to 15% in the current quarter and as much as 10% in the fourth quarter, TrendForce has estimated.
Some analysts expect Samsung’s smartphone business to benefit from the U.S. ban on Huawei in the second half.
Samsung remains the top producer of high-margin OLEDs, but hit a snag last year when supplies to Apple suffered after the iPhone X fared worse than expected.
Samsung's display division had sought financial compensation from Apple because actual shipments of OLED displays for iPhones fell short of contractual estimates, the Electronic Times has reported.
But its chips division remains both the biggest driver of profit and the one most vulnerable to an economic downturn.
Warning Issued Regarding Millions of Samsung Phone Updates
In related news, Aleksejs Kuprins, a malware analyst at CSIS Security Group, has revealed how an app called "Updates for Samsung" has been installed by more than 10 million users who have downloaded it from the official Google Play app store. The app promises firmware updates, but, in reality, redirects users to an ad-filled website and charges for firmware downloads.
Installing firmware updates is recommended not only to ensure your device is running with all the latest features and at peak efficiency, but also for reasons of security.
According to Kuprins, the app was named "Updates for Samsung" and made available through the official app store for Android users, which is often assumed to host safe apps only.
The app enables the user to search for firmware specific to their device, buy it is also stuffed with advertisement frameworks," according to Kuprins.
The app developers charging an annual fee of $34.99 to access what is actually a free of charge update process. In addition, the download rate is throttled and limited to 56 KBps, which means a typical firmware download would take at least 4 hours instead of just minutes if downloaded and installed directly on the handset following the official Samsung update notifications. Provided that free downloads almost always failed to complete, users are motivated to pay for fast downloads through paid premium packages.
A reasonable advice would be not to download apps such as this, but instead follow Samsung's procedures for downloading updates which will be shown on your smartphone as a notification and walk you through the simple and secure process for doing so.