Samsung has released its 2019 Q4 earnings report (opens in new tab), announcing that revenue has remained flat year-on-year, up a single percentage point, with operating profit dropping by a significant 34%.
The primary reason for this decline was cited as the fall in prices of memory chips, which have been Samsung’s main profit generator in recent years. Therefore, a fall in prices has had a huge knock-on effect on the company.
However, the mobile side of Samsung did do better than previous years with strong flagship sales and the successful Galaxy A series.
Despite a degree of caution around 5G, Samsung is hoping that the spread of 5G in 2020 will improve its phone sales.
“The Mobile Business aims to improve profits by expanding sales of premium models, such as the enhanced 5G lineup and new foldable devices,” a Samsung statement said. “The Network Business will focus on addressing the global 5G market as its Korean business is set to shrink following last year’s nationwide 5G adoption.”
Increased 5G availability
Increased 5G availability will have a positive impact on the mobile market, but Samsung also hopes to see an increase in memory sales to other handset manufacturers and data center companies.
“Memory market conditions will likely improve gradually thanks to increasing demand from data center companies and 5G smartphone adoption,” said the SAmsung report. “However, the actual pace of 5G expansion and its effects on DRAM content remain to be seen. The Company expects inventory to return to levels seen in previous years within the first half of this year and will focus on transitioning to the next-generation chip production; 1Z-nm DRAM process and 6th-generation V-NAND.”
Despite an underwhelming 2019, Samsung is pinning its hopes on the increase of interest around 5G, and hopes that increasing coverage and consumer interest will make for a better year in 2020.