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Samsung warns that the next few months will be difficult as the coronavirus pandemic disrupts global supply chains, affects demand for smartphones, and complicates adoption of 5G technology.
But the South Korean tech giant says the pandemic has brought about a fundamental change in the way of life of people, and predicted that the world’s confidence in digital services is here to stay, especially after millions of people have been forced To stay. at home, according to CNN.com
The company reported an operating profit of 6.45 trillion won ($ 5.3 billion) on Wednesday for the three-month period ended March, 3.5% more than the same period last year and according to expectations. from analysts.
Revenue increased 5.6% to 55.3 billion earned ($ 45.4 billion). Net profit fell 3.2% to 4.88 trillion earned ($ 4 billion).
However, this situation could be short-lived, and the company warned that the pandemic is already causing uncertainty in much of its business. Due to volatility, Samsung does not offer a full-year forecast.
Cloud services will help reduce demand
The world’s largest smartphone maker, which is also a key provider of memory chips and display screens for other manufacturers, such as Apple (AAPL) and Huawei, said demand for smartphones is expected to “drop suddenly.” due to Covid-19.
The memory card business, which has been a solid source of profit for Samsung for years, is likely to slow down, the company said. But it will be backed by demand for cloud and PC services as people continue to work remotely.
Work from home is here to stay
Samsung added that the pandemic has changed the way people live and work. While consumer demand may decrease, the company said it expects demand for memory chips to increase based on demand for servers and data centers.
“The way forward, people spend more time working and learning online, this has become the new norm for many people as a result of Covid-19,” said Ben Suh, executive vice president of investor relations at Samsung.
“The State Home Economy” has led people to play more online games, shop online, and watch movies at home. “We believe this will continue to be a new lifestyle for consumers,” added Ben.
5G launch may be delayed
Samsung also said that the virus could delay the global launch of 5G wireless technology.
Edison Lee, an analyst at Jefferies, cautions that due to Covid-19, as well as other factors, 5G smartphone sales will also be lower than originally expected for this year, especially in China, mostly the phone market. largest smart in the world.
Chinese consumers will not invest in 5G phones, as there are few innovative applications to satisfy consumers with 5G, and there is also limited coverage, and mobile operators will not subsidize 5G phones, a written note reads. by Lee last week.
