Samsung says foldable and 5G phones will improve its fortunes this year

Samsung released its financial results for Q4 2018 today and they’re in line with expectations. Its operating profit is down 29 percent compared to a year ago. It blames that on declining demand for memory, display and mobile products.

The company has already warned investors that it will see an annual earnings decline in 2019. However, it will try to launch new and innovative products that help prop up the bottom line. Samsung is particularly relying on the upcoming foldable and 5G phones to do that for the mobile division.

Foldable and 5G phones to help improve mobile division’s fortunes

Samsung’s IT & Mobile Communications Division posted 23.32 trillion won ($20.9 billion) in consolidated revenue for Q4 2018 with 1.51 trillion won ($1.3 billion) in operating profit. It thus saw a decline in both revenue and profit compared to Q4 2017. The operating profit is also down compared to Q3 2018 which Samsung says is due to a sluggish smartphone market overall even though there tends to be strong seasonal demand over the holiday season.

The company projects demand for smartphones and tablets to further decline in the first quarter of this year. It does expect that the Galaxy S10 will “prop up sales and business performance in the coming months.” The new flagship will be unveiled on February 20 in San Francisco.

It also points out that overall smartphone shipments will likely remain at a similar level as Q3 2018. Samsung is also reorganizing its mass-market models. It says this is being done to better respond to rapidly changing market trends and meet the needs of target customers. The new Galaxy M series has been launched as a part of this effort.

It mentions towards the end that the company aims to lead trends in the market by launching foldable and 5G phones for sustainable growth. The company hopes that this will boost smartphone sales and improve the business performance. It also predicts demand for smartphones to maintain at the same level seen last year.

Samsung is also going to secure optimized content and expand into new markets. It will improve connectivity between devices to increase user retention. This plans also includes expanding Bixby to other devices and connected services while also improving its AI capabilities.

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Interesting. I suppose even if they only make and sell one million foldable phones at $1800 a pop, that alone adds nearly 2 billion dollars revenue. So it might make a difference.