After being on the top of the smartphone industry, Samsung sees the decrease in the operating income by 28.71 percent down in the Q4 or 2018. The company predicted that their operating profit is down by 28.71 percent QOQ. The company has blamed the decreased demand for memory chips from the OEM due to increased competition from small manufacturers. The company has predicted their Q4 2018 operating income as $9.67 billion, which is way less than what financial experts anticipated. Samsung released the preliminary results for the quarter that ended in December 2018.
As there are rising tensions in the U.S. and China, the company is facing some export issues as these two countries are the top export destinations for Samsung. With both the countries trying to produce their materials, the demands for memory chips has declined, and the company is suffering the downfall in numbers. Not just the memory chips, but Samsung is seeing a minor decline in the smartphone and computer component sales from the last few quarters.
Recently, Apple’s low smartphone sales projection made the market go crazy, and that decision by Apple has affected Samsung. Being the biggest customer of the memory chips and the smartphone displays, the Apple’s low sales forecast had hit Samsung hard, and that might also be one of the reasons behind the shortfall in the operating income decline. That’s being the case for U.S. based clients. But the Chinese economy and the trade war between the U.S. and China has affected Samsung a lot. After the noticeable slowdown in the Chinese economy and competition from Huawei, the sales have declined mainly in the country. With this shock to the Memory chips business, which contributes the large amount to the profits, the company is thinking to revitalize their smartphone brands for diversification.