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Coronavirus Pandemic To Cause Significant Drop In Sale Of Phone And TV, Warns Samsung


04/29/2020


Coronavirus Pandemic To Cause Significant Drop In Sale Of Phone And TV, Warns Samsung
The first quarter performance of South Korea’s tech giant Samsung Electronics could not be boosted by the launch of the company’s new Galaxy S20 lineup and Galaxy Z Flip phone. Analysts however said that the worst for the company was yet to come. 
 
Samsung has warned that the novel coronavirus pandemic that is currently wrecking havoc throughout the world will "significantly" hurt the operations of the company in the next few months. 
 
Samsung said in a press release that a strong increase in demand for servers and PCs has also positively impacted the demand for the company's memory chip which has spurred its business as more people are now working from home orders amid directions from governments all across the world in order to prevent the spread of the pandemic. But Samsung said that the  "overall earnings are likely to decline from the previous quarter because Covid-19 will significantly impact demand for several of its core products."
 
The company further said that smartphones and TVs are included in it for which there will be a significant decrease in sale because of the coronavirus pandemic will dampen demand and will result in closure of stores and factories throughout the world. Samsung said that a shrinking market and store closures "make a drop in earnings seem inevitable," while "5G network investments may face reductions or delays" in Korea and across the world.
 
The company said that to boost its mobile business, it will further enhance its capabilities for online sale and spruce up its global supply chain and production operations. New devices to attract consumers will also be introduced by it. Bur Samsung said that "in the second half, uncertainties driven by Covid-19 will persist as the duration and impact of the pandemic remain unknown."
 
China was the epicenter of emergence of Covid-19, the disease caused by the novel coronavirus, with the disease being first detected in the Chinese city of Wuhan at the end of December last year. The virus has since spread to the rest of the world and more than 3.1 million people have now been infected with the disease globally. Strict lockdown measures have been imposed by countries, regions and cities all across the world which has caused shutting down of stores, cancellation of events and forcing citizens to stay back at homes in efforts to contain the coronavirus.
 
Samsung is the global leader in the sale of phones and TVs.  The company also manufactures chips which form an important part of the revenue streams of the company. Samsung is also one of the largest vendors of chips in the world. An increase of demand for chip from data centers that rely on the technology to store everything we're doing online has augured well for Samsung’s chip business during the quarter.
 
However a number of other business segments of the company had struggled.
 
Analysts and companies had expected 2020 to be strong year for the global phone industry because of new technologies such as 5G and foldable screens which was believed to arouse interest among consumers to spend again.
 
(Source:wwwcnet.com)