Mobile phone chip business to earn a lot of money but not too awesome for Samsung business

category:Internet
 Mobile phone chip business to earn a lot of money but not too awesome for Samsung business


Samsung has just released its first quarter earnings report, showing revenue growth of 20% and operating profit growth of 58%, thanks mainly to its strong demand for storage chips. From mobile phones to servers and many other products, these chips are needed. Samsungs performance has also been boosted by its flagship smartphone launched in mid March. But Samsung warned that the second quarter profit of its smartphone business should fall, because sales of flagship models are stagnant in the case of weak demand and increased marketing costs. The company warned that its display business (including customers, including apple) will be difficult at least in the quarter of June. Samsung also said that despite the strong demand for memory chips on servers, flash sales were affected by the slowing growth of smartphones. Despite the strong memory chip business in the second quarter, Samsung warned that the weakness of the display panel Market and the intensification of high-end market competition and the decline in mobile business profitability will challenge the overall profitability of the company. In order to boost sales of GalaxyS9 and GalaxyS9Plus, Samsung plans to expand its experience store with partners and continue to promote promotional activities such as discount trading. This may mean that Samsungs many new equipment will soon be greatly discounted. The company also said it would launch a new flagship model in the second half of this year, probably Note9, and will continue to invest in its intelligent assistant, Bixby, to provide a seamless, multi device experience for consumers. In recent quarters, the growth of the smartphone market has been slowing down. It is difficult for mobile phone manufacturers to make huge changes on devices and distinguish them from each other. With the abolition of subsidies in the US, the latest and best mobile phone prices are actually rising. All of this means that people need to wait longer to upgrade. Sales of smartphones declined for the first time in the fourth quarter of last year, according to Gartner, a market research firm. Samsung and its main competitor, apple, were also unlucky. Apple will announce its quarterly earnings next week, and it is expected that the company will acknowledge the weakness of iPhoneXs demand in the report, which also affects Samsung, which provides an OLED screen for Apple smartphones. But since Samsung launched GalaxyS9 and GalaxyS9Plus earlier than normal to boost sales growth, it may not feel the impact of a slowdown in mobile demand like apple. About 2/3 of Apples revenue comes from iPhone, and most of its profits also come from smartphones. Samsungs mobile and component business accounts for almost half of its sales, and most of its profits come from the chip business. In the first quarter, about 75% of Samsungs profits came from the chip business. Frank Gillett (FrankGillett), an analyst at Forrester, a market research agency, said: the reality is that the business diversification of Samsung has greatly reduced its dependence on smartphones, which is the opposite of the apple situation. Samsungs main business driving force is memory chips component business and new opportunities related to software, connecting devices and AI/ Internet of things platform. Samsung is the worlds largest manufacturer of mobile phones and televisions, but it has more memory chips than any other company in the world. Despite the stagnation of the TV market and the maturity of the mobile market, it also boosted Samsungs performance. Last year, Samsung became the worlds largest semiconductor manufacturer in terms of revenue and defeated the long term leading Intel (Intel). This quarter, Samsungs memory chip business revenue surged 43% to 17 trillion and 300 billion won (about 16 billion US dollars). Its overall semiconductor business sales increased by 33% to 20 trillion and 800 billion won. Samsung said that these operating revenues benefited from strong demand for memory chips by servers and graphics products. Because of the strong demand for semiconductor and smart phone, the semiconductor business has been boosted up in general. In addition to flash memory and DRAM, Samsung also manufactures a processor that acts as the device brain and manufactures displays and other components. Samsung not only makes use of these components to produce its own equipment, but also sells them to customers like apple. Many analysts expressed concern about Samsungs performance. Because iPhoneX uses Samsung OLED screen, many market watchers believe Apple phone sales are not as good as expected. Samsung said on Wednesday that its display business profits were affected by the slowdown in demand for flexible OLED panels and the intensification of competition between rigid OLED and traditional LCD screens. The flexible OLED screen allows Samsung to install curved screens on its devices, such as GalaxyS9. The company warned that demand for OLED screens will remain weak in the second quarter. However, Samsung said that OLED business will rebound in the second half of this year, probably because Apples new iPhone will use this technology. Samsungs latest mobile phones, GalaxyS9 and GalaxyS9Plus, are relatively small adjustments to the previous models, but they helped boost Samsungs mobile business significantly in the first quarter. Sales increased by 23% over the same period last year, reaching 22 trillion and 500 billion won (about 20 billion 800 million US dollars). Samsung said: the early release of GalaxyS9 and the strong sales of GalaxyS8 have brought us considerable profit growth. But GalaxyS9 and GalaxyS9Plus are very similar to previous generations, which may damage users demand for new devices. Research firm Canalys estimates that Samsung sold only 8 million GalaxyS9 and GalaxyS9Plus in the first four weeks after the launch of the new aircraft, which was flat with last years GalaxyS8 sales, but declined from GalaxyS7 sales in 2016. Canalys analyst TuanAnhNguyen said: the innovation of high-end smart phones is gradually disappearing. Overall, Samsungs revenue was 60 trillion and 600 billion won (US $50 billion 600 million) and its operating profit was 15 trillion and 600 billion won (US $14 billion 400 million). Earlier this month, Samsung said its revenue would jump to $55 billion. It also said its operating profit could soar 58% to $14 billion 700 million. (small) source of this article: NetEase science and technology report editor: Wang Fengzhi _NT2541 But GalaxyS9 and GalaxyS9Plus are very similar to previous generations, which may damage users demand for new devices. Research firm Canalys estimates that Samsung sold only 8 million GalaxyS9 and GalaxyS9Plus in the first four weeks after the launch of the new aircraft, which was flat with last years GalaxyS8 sales, but declined from GalaxyS7 sales in 2016. Canalys analyst TuanAnhNguyen said: the innovation of high-end smart phones is gradually disappearing. Overall, Samsungs revenue was 60 trillion and 600 billion won (US $50 billion 600 million) and its operating profit was 15 trillion and 600 billion won (US $14 billion 400 million). Earlier this month, Samsung said its revenue would jump to $55 billion. It also said its operating profit could soar 58% to $14 billion 700 million. (small)