Samsung, like Apple, feels sting of slowing global growth

Published January 8, 2019
Samsung Electronics President and CEO H S Kim speaks during a Samsung press event for CES 2019 at the Mandalay Bay Convention Center on January 7, 2019 in Las Vegas, Nevada. —AFP
Samsung Electronics President and CEO H S Kim speaks during a Samsung press event for CES 2019 at the Mandalay Bay Convention Center on January 7, 2019 in Las Vegas, Nevada. —AFP

Samsung expects its quarterly operating profit to fall 29 per cent compared with last year, potentially unsettling a tech sector already skittish about slowing global economic growth.

The announcement from the South Korean computer chip and smartphone giant comes less than a week after a weak outlook from Apple Inc jolted markets.

Samsung said late Monday that it anticipates a quarterly operating profit of about 10.8 trillion won ($9.6 billion). It expects fourth-quarter sales to drop almost 11 per cent from a year ago, to 59 trillion won ($52.4 billion).

Samsung said there's weak global demand for chips amid a worldwide economic slowdown, while its smartphones are facing stronger competition.

In a rare move for Apple, the company walked back its sales expectations for the last quarter of 2018, citing flagging sales in China . Its earnings report is due on Jan 29.

China is a huge smartphone market, accounting for one-third of the world's handset shipments, but its economy has been slowing and many people are leery of the rising trade tensions with the US. They have also begun to buy smartphones from Chinese manufacturers such as Huawei and Xiaomi. Many models are cheaper than those made by Apple and Samsung.

Tech companies are not alone in feeling the slowdown in China. Companies ranging from Tiffany & Co to Ford Motor Co have also warned of sales declines.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Judiciary’s SOS
Updated 28 Mar, 2024

Judiciary’s SOS

The ball is now in CJP Isa’s court, and he will feel pressure to take action.
Data protection
28 Mar, 2024

Data protection

WHAT do we want? Data protection laws. When do we want them? Immediately. Without delay, if we are to prevent ...
Selling humans
28 Mar, 2024

Selling humans

HUMAN traders feed off economic distress; they peddle promises of a better life to the impoverished who, mired in...
New terror wave
Updated 27 Mar, 2024

New terror wave

The time has come for decisive government action against militancy.
Development costs
27 Mar, 2024

Development costs

A HEFTY escalation of 30pc in the cost of ongoing federal development schemes is one of the many decisions where the...
Aitchison controversy
Updated 27 Mar, 2024

Aitchison controversy

It is hoped that higher authorities realise that politics and nepotism have no place in schools.