Samsung's operating profit posts double-digit fall in Q4, 2018

Jung Yeon-je  AFP  Getty Images

Jung Yeon-je AFP Getty Images

Samsung said a "stagnant and fiercely competitive" mobile market had weighed on earnings as marketing spend rose but smartphone sales volumes remained flat. Samsung announced that it will do the same due to declining memory demand and dwindling smartphone sales.

Apple's shares sank 10 per cent and sent shockwaves through the tech industry and global markets, as they struggle to price the threat of China's slowing economy.

Samsung wrote it expected its issues with the memory business to subside by the second half of the year, CNBC wrote, and it will try to regain ground in the smartphone market with new products like a "bendable" phone and gear designed for next-generation telecommunications networks. Samsung also noted that demand for DRAM from datacenters was lower than expected, this makes up 30% of their DRAM business.

It estimates sales at 59 trillion won or about 52 billion dollars. Prices for 128 gigabit MLC NAND flash memory chips fell about 3.4 percent.

After Apple preannounced that they'll miss their Q1 2019 target, Samsung announces that their operating profits nose-dived by almost 40% during the holiday quarter due to weakness in their memory chip business.

Samsung is blaming the decline in its memory chip business.

"You see, Apple's iPhones are already losing sales in China".

USA official warns of recession risk if interest rates go much higher
"I don't see anything that suggests the possibility of a recession in the near term is at all elevated", he said. It would be up to the Fed to decide how to balance those worries with the signals of a strong economy.

DRAMeXchange expects memory chip prices to fall 10 percent on an average in the first quarter of 2019. "That's even worse for Samsung because that would drag its chip prices down", Roh said, referring to Apple as a Samsung chip client.

Samsung has become the latest technology giant to slash its forecasts amid the economic slowdown in China and the trade stand-off between Beijing and Washington.

Samsung's shares were very volatile after the news, switching between positive as well as negative territory in trading in Asia this morning.

LG held a 3 percent share of the global smartphone market in the second quarter of a year ago, showed latest data from market tracker Counterpoint Research.

Moving on to the reasons why, it seems the intensifying competition from Chinese rivals have affected the brand more than initially expected in the smartphone market.

Analysts expect Samsung's profit to decline through 2019 as weakness in China persists, Refinitiv data showed.

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