Technology

Samsung misses estimates as 5G contest with Apple heats up

Samsung Electronics Co.’s revenue for the fourth quarter missed analysts’ estimates attributable to tepid smartphone gross sales and weak reminiscence chip costs.

South Korea’s greatest firm posted working earnings of 9 trillion received ($8.three billion) for the three months ended December in preliminary outcomes launched Friday. That compares with a 9.52 trillion received common of analyst forecasts. Gross sales for the quarter have been 61 trillion received. The corporate didn’t present web earnings or get away divisional efficiency, which it’ll report later this month when it releases last outcomes.

Samsung shares rose as a lot as 1.8% in early Seoul buying and selling on Friday.

Galaxy smartphone gross sales have been weaker within the quarter as Apple Inc. launched its first 5G-compatible iPhones and Chinese language rivals launched aggressive campaigns to safe the market share vacated by Huawei Applied sciences Co.’s sanction-stricken client enterprise. Samsung shipped 41 million 5G gadgets previously yr, based on Technique Analytics estimates, lagging behind Apple’s 52 million and Huawei’s 80 million offered largely at residence in China.

The Suwon-based firm plans to unveil its subsequent flagship sequence, the Galaxy S21, sooner than its regular annual schedule with a Jan. 14 on-line occasion. Rivals like Xiaomi Corp., Oppo and Vivo are aggressively positioning themselves to fill the void anticipated to be left by Huawei in worldwide markets.

Learn extra: Apple Provider Murata Expects Half Billion 5G Telephones in New 12 months

Reminiscence chip costs fell owing to a slowdown in server demand, although that’s anticipated to rebound beginning within the present quarter, based on C.W. Chung, head of pan-Asia expertise at Nomura Monetary Funding. A stronger Korean received in the course of the interval additionally eroded Samsung’s earnings.

“The corporate’s cellular and reminiscence companies are set to recuperate from the primary quarter,” Chung stated forward of the earnings launch. “Server demand is rising on a possible DRAM scarcity later this yr. The upward pattern within the reminiscence market will speed up and is prone to proceed as much as the top of 2021.”

​Fellow reminiscence chipmaker Micron Expertise Inc. issued a bullish forecast this week, predicting that the necessity for dynamic random entry reminiscence will doubtless exceed provide this quarter. The tightness of provide in DRAM is already driving up costs, based on Chief Govt Officer Sanjay Mehrotra. His firm and Samsung can be competing for a share of what’s anticipated to be a broad restoration in demand, led by the automotive sector and elevated utilization of extra superior, resource-intensive purposes like synthetic intelligence.

What Bloomberg Intelligence Says

“Sustained demand in 1H for cloud servers, smartphones and PCs, adopted by elevated IT spending in 2H, may spur DRAM bit development of greater than 20%. DRAM gigabytes per gadget might maintain increasing amid AI and 5G use.”

– Anand Srinivasan and Marina Girgis, BI analysts

By Sohee Kim

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