Pixel Envy

Written by Nick Heer.

Facing Slowdown in China, Samsung Copies Apple

Kenichi Yamada, Nikkei Asian Review:

Samsung Electronics’ disappointing fourth-quarter earnings report comes less than a week after Apple cut its revenue estimate, underlining the global repercussions of the Chinese economic slowdown.

Both of the South Korean company’s core businesses — memory chips and smartphones — are facing downturns this year. With no other growth business to fill the hole, Samsung finds itself scrambling to trim the fat.

Samsung said Tuesday that operating profit plunged 29% in the three months ended in December, to 10.8 trillion won ($9.6 billion). The preliminary guidance represents the company’s worst quarter since July-September 2016, with the drop exceeding analyst expectations by 2 trillion won to 3 trillion won.

That second quoted paragraph is particularly interesting: Samsung is doubly exposed because it makes its own consumer electronics and sells components for other companies’ products.

Anyway, it wouldn’t surprise me to see reports like these from several other companies in the coming weeks.