Samsung warns 2016 will be lean

[Artdeco]

Samsung Electronics warns of tough 2016 amid fourth-qaurter outlook concerns


SEOUL South Korean tech giant Samsung Electronics Co Ltd said it expects a difficult business environment in 2016 due to weak global economic conditions and heightened competition in key businesses including memory chips and smartphones.

In a statement on Monday, Samsung said Chief Executive Kwon Oh-hyun told employees in a New Year's address that low global growth will persist this year, with greater uncertainty stemming from issues such as financial risks for emerging countries.

The comments, which didn't disclose specific forecasts, come amid growing concerns that October-December results for the world's biggest maker of smartphones and chips may be weaker than previously expected. By 0302 GMT (11.02 p.m. ET Sunday) Samsung shares were down 3.4 percent, after earlier dropping 3.5 percent to a three-month low, while the broader Seoul market was off 1.5 percent.

"Negative impact from weak demand and falling sales prices for semiconductor and liquid crystal display industries was likely bigger than initially anticipated," brokerage Korea Investment said in a report issued separately on Monday.

Korea Investment lowered its estimate for Samsung's fourth-quarter operating profit to 6.4 trillion won ($5.41 billion) from 6.8 trillion won previously. The mean estimate of 36 analysts' forecasts compiled from a survey by Thomson Reuters I/B/E/S is for operating profit of 6.8 trillion won, 8.1 percent lower than the 7.4 trillion won booked in the third quarter.

Samsung CEO Kwon also warned of greater competition in the firm's main businesses, Samsung said in its statement, without offering detailed financial forecasts.

The firm is expected to issue official earnings guidance for the October-December period on Friday. It already said in late October that operating profit for the quarter will be lower than July-September earnings, citing seasonally weaker demand for its component businesses.

(Reporting by Se Young Lee; Editing by Kenneth Maxwell)

http://www.reuters.com/article/us-samsung-elec-outlook-idUSKBN0UI06920160104

Because, you know, Apple is doomed.

 

[Commodus]

I know this thread mainly exists because of schadenfreude, but it raises a fair concern... so much for Samsung being on the cusp of a mobile turnaround. And unlike analysts' guesses, this is the company itself sounding the alarm (before it offers its official guidance, even).

It sounds like the market dynamics from much of 2014-2015 remain intact: Samsung is being squeezed at the high end by Apple, and at the low end by Chinese OEMs that can usually undercut it on price. It hasn't found the magic bullet that fixes one or both problems.

 

[corkyg]

If today is a harbinger, as well as last month, Samsung may be right.

 

[Artdeco]

I know this thread mainly exists because of schadenfreude, but it raises a fair concern... so much for Samsung being on the cusp of a mobile turnaround. And unlike analysts' guesses, this is the company itself sounding the alarm (before it offers its official guidance, even).

It sounds like the market dynamics from much of 2014-2015 remain intact: Samsung is being squeezed at the high end by Apple, and at the low end by Chinese OEMs that can usually undercut it on price. It hasn't found the magic bullet that fixes one or both problems.

That whoosh you heard is all the air getting sucked out of the room, Samsung is getting squeezed as predicted some time ago. Apple crushing the high end, and the Chinese manufacturers gobbling up the low, midrange, and encroaching on the high end. The market has changed fundamentally, and there's no going back.

I think SS makes very good phones, I've owned a handful, but the Android phone market will mirror what happened to PC's, none of the old PC powerhouses survived.

Apple moved upmarket and is relatively insulated at this time. Dunno if it'll last long, but it's an interesting market to watch.

 

[Ns1]

but like, samsung has tons of revenues and assets and stuff

 

[Artdeco]

but like, samsung has tons of revenues and assets and stuff

And their CEO has been twice convicted and pardoned IIRC.

 

[dawheat]

That whoosh you heard is all the air getting sucked out of the room, Samsung is getting squeezed as predicted some time ago. Apple crushing the high end, and the Chinese manufacturers gobbling up the low, midrange, and encroaching on the high end. The market has changed fundamentally, and there's no going back.

I think SS makes very good phones, I've owned a handful, but the Android phone market will mirror what happened to PC's, none of the old PC powerhouses survived.

Apple moved upmarket and is relatively insulated at this time. Dunno if it'll last long, but it's an interesting market to watch.

I've said this before and will say it again. These warnings spell doom for other Android OEMs who want to focus on the mid and upper range - specifically HTC, Sony, and to a lesser extent LG.

The lowered expectations by Samsung Electronics still map out to 20+ billion in profit this year with smartphone maybe making up a quarter of that. Compare that to HTC, Sony, and LG who can barely break even at best in smartphones. Samsung will keep chugging along and take what money they can until they can pivot to whatever is next. They're probably fine with Android smartphones turning into a TV-type commodity market where they keep a similar 25% market share and make money through vertical integration and scale.

 

[lopri]

I think smartphone market is following the lead of tablet market. (i.e. saturated) I am not sure if curved screens or 3D touch will be enough to buck the trend.

 

[theeedude]

http://www.reuters.com/article/us-samsung-elec-outlook-idUSKBN0UI06920160104

Because, you know, Apple is doomed.

Not mutually exclusive.

 

[Artdeco]

Guess we'll have to revisit the subject next year

 

[zerogear]

Even if these two companies completely stop selling any products, they have enough cash reserves to sit on for years.

 

[sbpromania]

Even if these two companies completely stop selling any products, they have enough cash reserves to sit on for years.

They do, but they need to keep selling products, otherwise their stocks will go down, and alongside with it, the cash reserves will perish quickly.

 

[Artdeco]

And SS released it's quarterly numbers: http://www.bloomberg.com/news/artic...sses-estimates-on-falling-chip-display-prices

Seems they missed.

 

[Oyeve]

If they kept msd in their phones.....

 

[dawheat]

And SS released it's quarterly numbers: http://www.bloomberg.com/news/artic...sses-estimates-on-falling-chip-display-prices

Seems they missed.

A y/o/y profit increase is heading in the right direction at least, though it wasn't as large an increase as the previous quarter.

They are warning the heck out of 2016 however - though that still means 20 billion in annual profit. Not bad compared to everyone except Apple.

 

[Artdeco]

A y/o/y profit increase is heading in the right direction at least, though it wasn't as large an increase as the previous quarter.

They are warning the heck out of 2016 however - though that still means 20 billion in annual profit. Not bad compared to everyone except Apple.

Yes, they continue to be the most profitable Android phone manufacturer, and that's not easy.

 

[DealODay]

This is all because they didn't include a removable battery and SD slot in their new s6 and note series. Had they done that one thing, they would've had trillions, TRILLONS!

 

[Mopetar]

Yes, they continue to be the most profitable Android phone manufacturer, and that's not easy.

Technically since most of the others are losing money most every quarter, Samsung just needs to make a handful of pocket change and they'd still be the most profitable Android manufacturer.

Personally, I think they'll be fine even if their phone business declines. They still make some of the best components and as long as they don't fall behind there, they're still going to basically print money. Perhaps not as much as some would like, but you won't find them wanting to trade places with many other companies.

 

[Commodus]

Time to update this thread with some hard data, too: Samsung's fiscal Q1 2016 results.

We knew a lot of this because of Samsung's earlier heads-up, but that giant drop in net profits and the big analyst expectations miss... ouch. So much for the apparent signs of improvement. It's not going to be a pretty 2016 for this company.

 

[jhansman]

The S7 has to be a winner for them. If they can't grab a significant portion of the mobile market with their flagship phone, things can only get worse. I'm hanging onto my S5, which has been the best phone I've yet owned, until it's clear that Samsung has something better to offer. Otherwise, it's off to Google I go.

 

[MongGrel]

You can only sell so many phones I guess.

I still do not own a "smart" phone.

 

[holden j caufield]

The only reason I stayed with samsung is the Note 4 is still probably the best ~5.5" phone, there is great ROM support for it and the Samsung VR Oculous works with it. Which is actually pretty darn amazing the VR that can be done on a phone.

 

[elitejp]

Actually if ss does offer the s7 with a removable battery and expanded storage plus the usual improvements I wouldnt be surprised if it doesnt sell very well. The chinese market can do low end phones. Im over here. They look good and sell well but its not because its quality its because its what people can afford. However iphones still sell well becaue of the prestige of owning a iphone. My point being is that ss needs to offer something different than iphone and if they do then I think they can still have a very successful year.

 

[Zaap]

This is all because they didn't include a removable battery and SD slot in their new s6 and note series. Had they done that one thing, they would've had trillions, TRILLONS!

People joke, but maybe, just maybe removing features and leaving millions of current Samsung flagship owners virtually NO overly compelling reason to upgrade, in a market that was already slowing, may not have been the best move ever.

There are mavens in business- people that are uber-enthusiasts of a company's product, who are influential and help sell that product to many other people through informed recommendation. I believe it's fully possible that Samsung lost a lot of its mavens.

Anecdotally speaking, personally among people I know that were once huge supporters and touters of Samsung's phones (myself included) interest has sharply nosedived. Yeah, yeah, I know- anecdotal, just a few tech-geeks here and there, who cares, yada yada.

Well sure, except I see the same pattern so often repeated by others places like this: "Eh, my current Samsung _ is good enough, I see no reason to upgrade/I've started looking elsewhere."

Any business that really thinks that's a super-healthy situation to have where your once biggest supporters now ho-hum you and cast eyes elsewhere- then I think that business should rethink things.

Samsung's a big player. I believe they could, if they really wanted, come out with rethought phone lines that bring the mavens back in droves, earn the desire of the tech-crowd and general consumers alike and be an absolute MUST-HAVE device across many demographics. But I just don't think they're interested anymore, or their business plans have just shifted to: "Do what Apple does, screw the old line of supporters and users, go for a new demographic of people that want the iPhone-that's-not-an-iPhone" whoever they are. Seems to be working out great.

 

[WelshBloke]

...

You know that it makes you just as annoying as that other guy when you post threads like this don't you?