Apple and Samsung: why the profit of these two mobile giants is decreasing


Samsung said on Tuesday night that it estimates operating profit $ 9,670 million for the period from October to December of last year by 29% less than in the same period of 2017.

And those weak profits of the world's largest smartphone manufacturer have been added to investors' concerns about Apple (the third in the list by Chinese Huawei), which announced an unusual profit drop last week of 2018.

Apple's CEO, Time Cook, said on Wednesday that the company estimates revenue from around 84,000 million USD in the last three months of last year under forecast of at least 89,000 million USD.

This notice not only warned investors, but the stock market in general.

On the same day, Apple shares drop by 10%, worth 142,19 USD. In just four trading days in 2019, Manzanita's value has already lost $ 10.

As in other consumer goods companies, at the end of the year the holiday season is prone to last year as the strongest quarter.

But these Apple revenue forecasts (final results will be released early in February) would fall by almost 5% compared to the same period last year and represent the company's first quarterly year-on-year decline from 2016.

And the situation in the house of Apple's big competitor in the mobile phone market, Samsung, does not seem great for celebrations.

The South Korean company reported a fall in sales by 10% compared to the last quarter of 2017.

Chinese economy

What are the main reasons for Apple and Samsung's profit cuts?

Both Apple and Samsung do not usually explain their earnings forecasts, but this time they broke this habit.

Samsung has decided to issue a statement detailing the revenue estimates for the fourth quarter "mitigate confusion" among investors, because the forecast was well below market forecasts.

"We expect that revenues in the first quarter of 2019 will remain moderate due to difficult conditions for dealing with memory chips," he said.

Analysts surveyed by Reuters are instead expecting that Samsun's income will continue to decline in 2019 due to this The slowdown of the Chinese economy has reduced the demand for chips and telephones.

Samsung is one of the leaders in the global smartphone market, but is facing the growing competition from Chinese competitors such as Huawei.

Apple's problems also come from China. In a letter to investors, Apple's CEO drew attention to the Asian giant as the source of their problems. In this country, it generates approximately 20% of its revenue.

"Although we expect some of the challenges in key emerging markets, We did not know how to predict the extent of the economic slowdown, especially in Chinahe declared.

This is the first time in 15 years that the iPhone manufacturer has analyzed its financial results in a letter to its investors.

Commercial war and sales

In addition to the problems with the slowdown in the economy, Apple said that voltage The United States and China had it consumer confidence.

"As financial markets increased the atmosphere of rising uncertainty, it seemed that the effects were also reaching consumers, and the traffic to our stores and partners in China was reduced as a quarter progressed," the letter.

Finally, Apple's CEO acknowledged this The less developed countries, as expected, decided to update the iPhone phones.

This confirms that iPhone sales are declining. Some analysts say Apple's new drop reflects some of the problems that the technology company has been pulling for some time.


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