Samsung's quarterly profits fall 60 percent on back of weak chip sales

midian182

TechSpot Editor
Staff member

In late March, Samsung took the unprecedented step of issuing a warning before releasing its first-quarter earnings guidance. In addition to the declining profitability of its chip business, falling demand for its displays has also had an effect.

Overall, Samsung’s operating profit for the quarter was at 6.2 trillion won ($5.3 billion), down from 15.64 trillion won ($13.4 billion) a year earlier. Revenue for the period was down 13 percent YoY to 52.4 trillion won (around $44 billion).

Samsung did say that its Galaxy S10 phones sold well during the quarter. No exact figures for the models were given, though it did reveal that a total of 78 million of its phones were sold during the first three months of the year. But this wasn’t enough to offset the other declines.

“First quarter earnings were weighed down by the weakness in memory chips and displays, although the newly launched Galaxy S10 smartphone logged solid sales,” said the company, in a statement.

Samsung’s bottom line is expected to improve. The firm said it would “strengthen its product lineup through innovations such as Galaxy S10 5G and Galaxy A80 and continued reorganization of its product offerings.” The Galaxy Note 10 and eventual (hopefully) release of the Galaxy Fold should also see an uptick in its business. And while prices are predicted to keep falling, Samsung expects to see a slight improvement in the memory chip market.

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QuantumPhysics

TS Evangelist
Samsung is at the forefront of SSD production. I just want their SSD to get cheaper. Hopefully their lackluster smartphones don't collapse them.
 

yRaz

Nigerian Prince
Samsung is at the forefront of SSD production. I just want their SSD to get cheaper. Hopefully their lackluster smartphones don't collapse them.
I understand that you are a big fan of iPhones, nothing wrong with that, but Samsung doesn't make lack luster smartphones. If anything, they're the standard by which manufactures judge Android phones against

But I can certainly relate to their SSD prices

Yeah... the Fold will really help here... too bad they break when folded while turned on...
They had reviewers beta test it and then they delayed the lunch accordingly, I think Samsung handled the fold fiasco very well.
 

QuantumPhysics

TS Evangelist
I understand that you are a big fan of iPhones, nothing wrong with that, but Samsung doesn't make lack luster smartphones. If anything, they're the standard by which manufactures judge Android phones against

#1 Samsung sits atop the Android market - which isn't saying much.

#2 The Galaxy Fold failure was perfect. I personally don't buy into the iphone vs. Android hype, but finally, the "Samsung did it first" voices have been crushed.
 

dogofwars

TS Addict
Samsung is at the forefront of SSD production. I just want their SSD to get cheaper. Hopefully their lackluster smartphones don't collapse them.
I understand that you are a big fan of iPhones, nothing wrong with that, but Samsung doesn't make lack luster smartphones. If anything, they're the standard by which manufactures judge Android phones against

But I can certainly relate to their SSD prices

Yeah... the Fold will really help here... too bad they break when folded while turned on...
They had reviewers beta test it and then they delayed the lunch accordingly, I think Samsung handled the fold fiasco very well.
You have to also handle the ID10T factor too which seem to have worked there ;)
 
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Squid Surprise

TS Evangelist
They had reviewers beta test it and then they delayed the lunch accordingly, I think Samsung handled the fold fiasco very well.
Really?!?!? Those weren't beta tests! Who has the media beta test anything?!?!!?
They claimed they'd already had it tested - and they did... just not while the phone was turned on - oops...
They gave it to reviewers to.. wait for it... REVIEW the phone! When they started breaking on them, they got tons of bad press - bad press they could have easily avoided with PROPER beta testing!

But the Fold was only a niche product meant to test the waters for future foldable devices down the road - they were never going to see any real-world profits from it.
 

yRaz

Nigerian Prince
Really?!?!? Those weren't beta tests! Who has the media beta test anything?!?!!?
They claimed they'd already had it tested - and they did... just not while the phone was turned on - oops...
They gave it to reviewers to.. wait for it... REVIEW the phone! When they started breaking on them, they got tons of bad press - bad press they could have easily avoided with PROPER beta testing!

But the Fold was only a niche product meant to test the waters for future foldable devices down the road - they were never going to see any real-world profits from it.
there is no way Samsung didn't know about their flaws. They gave out phones, for free, to reviewers and let the things have some real world usage. You can only test something so much in a lab. Once you idoit proof something the world goes and makes a better idoit.

(as a side note, idoit is blocked but other swear words aren't?)

I also don't think foldable phones, in theory, are a niche product. I can browser the internet, make calls, send texts but one thing I CANNOT DO is use my phone as an E-reader and it doesn't have a small screen. I cannot tell you how much I would love to have a phone that's also a tablet instead of deciding if I really want to carry my tablet with me for the day just so I can read.

I would only call a foldable phone a niche product when considering it's weaknesses as a real device, not an idea.

Further, I think Samsung handled the whole fiasco quite well. Other companies either blame the user or go dark altogether. Speaking of which, what does Hauwei have to say about Samsung's phone? Is it going to have the same issues? They seemed to have gone dark on the whole issue. Are they just going to let Samsung take all the heat since they were first to market? And I use "first to market" loosely as not a single fold has be sold

The Fold is undeniably a cool device, it's just too fragile for real world use in it's current state.
 
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Squid Surprise

TS Evangelist
there is no way Samsung didn't know about their flaws. They gave out phones, for free, to reviewers and let the things have some real world usage. You can only test something so much in a lab. Once you ***** proof something the world goes and makes a better *****.

I also don't think foldable phones, in theory, are a niche product. I can browser the internet, make calls, send texts but one thing I CANNOT DO is use my phone as an E-reader and it doesn't have a small screen. I cannot tell you how much I would love to have a phone that's also a tablet instead of deciding if I really want to carry my tablet with me for the day just so I can read.

I would only call a foldable phone a niche product when considering it's weaknesses as a real device, not an idea.

Further, I think Samsung handled the whole fiasco quite well. Other companies either blame the user or go dark altogether. Speaking of which, what does Hauwei have to say about Samsung's phone? Is it going to have the same issues? They seemed to have gone dark on the whole issue. Are they just going to let Samsung take all the heat since they were first to market? And I use "first to market" loosely as not a single fold has be sold

The Fold is undeniably a cool device, it's just too fragile for real world use in it's current state.
If they actually knew their device had flaws (and we're talking a pretty major one here), then why on Earth would you give it to the media?!!??! If you want it tested in the "real world", you hire a few employees to use the device first!! It's not like they gave out 5000 to reviewers... we're talking a few dozen!

And the article was talking about how Samsung's profits were down but hoped that the Fold would make up for some of those losses... but they didn't make very many - so even at $2,000, they weren't going to make nearly enough money off of it to offset any losses... The Fold's purpose is to make future foldable devices profitable... The "Fold 2" or whatever they call it will be the device that might make them real money... Hence my calling it a "niche device"...

Yes it's possible that it won't be a niche device after a year or so... but right now, niche it is... actually, right now, it simply is nothing.... but I'm assuming they'll fix it eventually and start selling them again...
 

yRaz

Nigerian Prince
If they actually knew their device had flaws (and we're talking a pretty major one here), then why on Earth would you give it to the media?!!??! If you want it tested in the "real world", you hire a few employees to use the device first!! It's not like they gave out 5000 to reviewers... we're talking a few dozen!

And the article was talking about how Samsung's profits were down but hoped that the Fold would make up for some of those losses... but they didn't make very many - so even at $2,000, they weren't going to make nearly enough money off of it to offset any losses... The Fold's purpose is to make future foldable devices profitable... The "Fold 2" or whatever they call it will be the device that might make them real money... Hence my calling it a "niche device"...

Yes it's possible that it won't be a niche device after a year or so... but right now, niche it is... actually, right now, it simply is nothing.... but I'm assuming they'll fix it eventually and start selling them again...
The fold would never be profitable, it is a "Halo" device meant to advertise the brand. Think of it like the GTX Titan. Most people aren't buying it, they get the GTX 2070-2070ti. However, that titan keeps coming up at the top of benchmark. People don't think "my 2070ti is the best" They think " nvidia is the best!". Samsung has been working on a foldable phone since 2011. I have no idea how much money they have invested in it, but I've seen estimates in the $200,000,000 range. When working on something like this, you don't research something to make money from selling you're own devices, you license the tech out to other companies. Hardware isn't the money maker, it's patients.

And I'm so very happy you came up with the idea of giving the device to Samsung employees for testing, maybe you should apply for an R&D job there? I'd also hazard a guess that they did give it to employees and that the employees knew the weaknesses of the phone so they babied it. My point there is that Samsung employee use likely would not reflect real world useage.

Now if you had been paying attention to the fold the way I have, and read all of the reviews, you would know that the reviewers actually LOVED using the device but their experience was cut short either by stupidity(most people destroyed their phone by pulling the flexible digitizer off the front and then there was the person who got a rock stuck under the fulcrum
 

Squid Surprise

TS Evangelist
The fold would never be profitable, it is a "Halo" device meant to advertise the brand. Think of it like the GTX Titan. Most people aren't buying it, they get the GTX 2070-2070ti. However, that titan keeps coming up at the top of benchmark. People don't think "my 2070ti is the best" They think " nvidia is the best!". Samsung has been working on a foldable phone since 2011. I have no idea how much money they have invested in it, but I've seen estimates in the $200,000,000 range. When working on something like this, you don't research something to make money from selling you're own devices, you license the tech out to other companies. Hardware isn't the money maker, it's patients.
That's what I said... although not quite as verbose... agreed...

And I'm so very happy you came up with the idea of giving the device to Samsung employees for testing, maybe you should apply for an R&D job there? I'd also hazard a guess that they did give it to employees and that the employees knew the weaknesses of the phone so they babied it. My point there is that Samsung employee use likely would not reflect real world useage.
But here's the thing... Samsung, after already deciding on a release date to sell the device, gave this device to the media. They only gave a few dozen out... This was NOT a beta test!! No one performs beta testing via the media... that's just insane... Anyways, when the "defect" was found (and it IS a pretty major one), they were forced to indefinitely postpone the release - which is a PR disaster, no matter what spin they put on it.

Now if you had been paying attention to the fold the way I have, and read all of the reviews, you would know that the reviewers actually LOVED using the device but their experience was cut short either by stupidity(most people destroyed their phone by pulling the flexible digitizer off the front and then there was the person who got a rock stuck under the fulcrum
You can argue whether the "defect" is due to user error, but it doesn't matter... the FACT that the device isn't being released right now is proof that it's quite serious... yes, the reviewers loved it... That is irrelevant if it breaks!

And I've been following the Fold for quite awhile. This site (and many others) has been posting numerous articles on it as well as other foldable devices. Many have argued (including me) that this is a technology that is ill-suited to smartphones. Time will tell on that... I still believe that it would be far better to have this tech in a laptop - imagine a 13" laptop able to unfold its screen to give you a 28" (or bigger) monitor!!

The few extra grams of weight and centimetre of thickness would be far less noticable in this form factor compared to the crazy thickness of a foldable smartphone...
 

dogofwars

TS Addict
If they actually knew their device had flaws (and we're talking a pretty major one here), then why on Earth would you give it to the media?!!??! If you want it tested in the "real world", you hire a few employees to use the device first!! It's not like they gave out 5000 to reviewers... we're talking a few dozen!

And the article was talking about how Samsung's profits were down but hoped that the Fold would make up for some of those losses... but they didn't make very many - so even at $2,000, they weren't going to make nearly enough money off of it to offset any losses... The Fold's purpose is to make future foldable devices profitable... The "Fold 2" or whatever they call it will be the device that might make them real money... Hence my calling it a "niche device"...

Yes it's possible that it won't be a niche device after a year or so... but right now, niche it is... actually, right now, it simply is nothing.... but I'm assuming they'll fix it eventually and start selling them again...
ID10T factor, even with all the warning and test in lab you need to get it in the hand of reviewer to see if they will break it, they should be wiser than the general population but still fall into the ID10T factor. Employee are wiser and know in advance what not to do so you can't get that ID10T factor thing.
 

Squid Surprise

TS Evangelist
ID10T factor, even with all the warning and test in lab you need to get it in the hand of reviewer to see if they will break it, they should be wiser than the general population but still fall into the ID10T factor. Employee are wiser and know in advance what not to do so you can't get that ID10T factor thing.
I’m not arguing against beta testing.... but you don’t use the media / reviewers to do this! You hire real beta testers!!! If they’d done this properly, they’d have seen the problem and avoided it!