LG lost another $192 million on smartphones during Q4 2017, nonetheless reporting all-time high overall annual revenues of $55.4 billion.
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The past few weeks have been all about damage control for Samsung in the wake of the shocking Galaxy Note 7 double recall, and now it’s time for a quick damage check. An official, final and painful Q3 2016 audit, previewed not long ago, but still decidedly uncomfortable to see confirmed for devoted fans of the world’s largest smartphone manufacturer.
Gone are the days of record-breaking financial growth across the board, although a couple of divisions did manage to boost their operating profit both sequentially and annually. Even the mobile business reported a microscopic quarterly net gain of 0.1 trillion won, which is however massively down from the Q3 2015 score of KRW 2.4tn and Q2 2016’s 4.32 trillion won surplus tally.
The 100 billion won ($87.8 million) is in fact the worst profit result of Samsung’s IM, aka mobile, department in almost eight years, while the overall 5.2 trillion won ($4.5 billion) marks a 30 percent annual decline, as well as the lowest total profit score since Q3 2014.
Consolidates sales didn’t do much better between July and September 2016, dropping 7.5 percent compared to the same period last year, from KRW 51.68 trillion to 47.82tn. But it’s not all doom and gloom for a company now focused entirely on “regaining consumers’ confidence”, as Galaxy S7 and S7 Edge demand remains “solid”, with “steady” mid-tier growth achieved by Galaxy A and J-series devices.
Up next, the aim is to “normalize” the mobile business, and expand sales of “new flagship products with differentiated design and innovative features.” Can you say “full-screen” Galaxy S8?
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For Sony, the past fiscal year started on April 1, 2016 and concluded this March 31, seeing overall sales stick to approximately the same level as the previous 12 months, with “significant increases” reported in gaming and semiconductors departments, but the Mobile Communications segment yet again posting disappointing results.
Namely, the Japanese tech titan’s smartphone operating revenue slipped from 1.1 trillion to just 759.1 billion yen ($6.8 billion), representing a 32.7 percent yearly decline, caused by a decrease in unit sales “mainly in Europe, the Middle East and Latin America”, as well as a “significant downsizing of unit sales in unprofitable regions.”
In other words, Sony anticipated and even pursued this slump by “contracting” its mobile business in certain “unfriendly” markets, not to mention reducing the number of new Xperia releases worldwide, and at the end of the day, the larger goal was achieved.
After losing 61.4 billion yen between April 2015 and March 2016, Sony Mobile actually yielded a (tiny) operating profit of 10.2 billion yen, or $91 million. What you have to wonder is how can that figure be boosted when only 2.9 million units were shipped in the three opening months of 2017? Yes, you read that right, 2.9 mil, which is about as much as the Galaxy S8 alone probably sold in a few days of global availability.
Sony’s smartphone tally for the full FY16 is similarly modest, at 14.6 million units, down YoY from 24.9M. Sounds like a dying business, no matter how you spin it, in stark contrast with always profitable, always popular PlayStations, image sensors and recorded music.
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Foxconn has reported its lowest Q1 profits in the last two decades. The COVID-19 pandemic has had an enormous impact on smartphone demand, and it seems that recovery could take a long time.
Foxconn’s Liu Young-way had some words regarding the company’s Q1 profits. These were down 90 percent on a year-on-year as a result of production shutdowns because of the coronavirus.
According to a report from Reuters:
“Foxconn’s first-quarter profit plunged to its lowest in two decades, all but wiped out, after the coronavirus pandemic forced the Taiwanese firm to suspend manufacturing operations in China and knocked demand from customers including Apple […]”
Hon Hai will stabilize in the second quarter,” Foxconn said in a statement, adding that all of its main factories in China have now resumed normal operations.”
Net profit for January-March slumped 90% to T$2.1 billion ($70.3 million) from a year earlier – the lowest level since the first quarter of 2000 and well short a Refinitiv consensus estimate of T$8.88 billion. Revenue declined 12%.
For the second-quarter, the company expects revenue will show double-digit growth from January-March although it will still likely mark a single-digit decline from the same period a year earlier.
The division is forecast to post a 15% yearly decline in sales as the virus is set to have “an enormous” impact on demand. In the first quarter, the division accounted for 42% of revenue.
“For consumer electronic products, because everyone is staying at home, naturally it affects consumers’ purchasing power and such power might take a very long time to recover.”
The second half of the year is still a mystery, but Liu expects growth in the computing division since lockdowns create demand for devices aimed at people who work from home and those looking for products that provide home entertainment.
Source 9to5Mac
Via Reuters
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Apple and Google are already feeling pressure from the issues generated by the latest Epic Games drama. However, that’s nothing compared to the possibility of facing the laws of a country. The new Russian bill would reduce Apple and Google’s percentage of app sales from 30% to 20%.
A new piece of Russian legislation could hinder the profits Apple and Google make out of app sales. According to a report from Reuters, politician Fedot Tumusov has proposed to cap the commission on app sales to 20 percent. It would also require that a third of the commissions from in-app purchases go toward an IT specialist training fund. If approved, it would reduce the App Store and the Play Store’s earnings from 30 percent to just 20 percent, and it would also be a growth opportunity for developers.
If the bill passes, it could force the companies to reduce their earnings from app sales or even stop offering app downloads in the country. Russia is an important smartphone market. One that isn’t pleased with the effects Apple and Google’s policies have on Russian developers. Imagine what would happen if more countries decide to follow this example.
Source Android Authority
Via Reuters
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