The tech giant reported Thursday that operating profit plunged 34% to 7.2 trillion Korean won ($6 billion) in the quarter that ended in December compared to a year ago, in line with its forecast issued earlier this month.
Sales rose 1% to almost 60 trillion Korean won ($50.5 billion), beating expectations of a 4.4% decline.
Samsung's shares closed down 3.2% in Seoul on Thursday.
The firm attributed its latest profit drop to poor demand for display panels and "the continued fall in memory chip prices," a problem that has dogged its earnings for at least a year.
Prices of memory chips around the world have declined over the past year due to a glut in the market, though analysts are projecting a rebound in 2020 as the globalsupply stabilizes.
Samsung said Thursday it still expects some weak sales for a while, particularly in memory chips, display panels and consumer electronics due to lower seasonal demand over the first quarter.
Overall, however, this year could bring some relief. Samsung says it's anticipating a general pickup across its business in 2020, attributing the expected improvements to "increasing demand from data center companies" for memory chips, as well as greater adoption of 5G smartphones.
The conglomerate also posted an upswing for its mobile unit in the last quarter, "thanks to solid sales of flagship Galaxy smartphones" as well as changes to make its wider device lineup more profitable, it said.
Samsung used to sell too many smartphone models, leaving customers confused, according to analysts at Counterpoint Research. They said last fall that the company simplified its lineup in 2019, fixing that problem.
Last year, Samsung also "drastically increased its portfolio and slashed operating margin" to fend off competition from Huawei, which has made no secret of its desire to overtake Samsung as the world's biggest seller of smartphones, noted Mo Jia, a research analyst at Canalys.
"But the battle never came," he wrote in a Thursday report, pointing out that Huawei was placed on a US trade blacklist last May that stifled its overseas business.
Ultimately, Samsung managed to retain — and slightly extend — its lead in the global smartphone market in 2019, taking 21.8% share of all shipments followed by Huawei and Apple at 17.6% and 14.5% respectively, according to Canalys.
The global rollout of 5G has already provided a boost. Since hitting the market last year, Samsung's 5G smartphones have proven to be so popular that they've trumped the company's own sales targets. The company said earlier this month that it accounts for more than half the global market.
Nintendo had its strongest Switch quarter ever this holiday season, moving 10.81 million units to reach a total of 52.48 million sold as of the end of 2019. That means it’s now overtaken the SNES to become Nintendo’s third best-selling home console of all time behind the Wii and the NES.
Pokémon Sword and Shield were a huge hit over the holiday season, moving more than 16 million copies. That’s almost 4 million more than Super Smash Bros. Ultimate registered in its launch quarter a year ago, although Pokémon went on sale about three weeks earlier. Luigi’s Mansion 3 was another big success, selling over 5 million copies.
Nintendo’s Switch hardware sales are up about 15 percent year-on-year, which the company attributes partly to the launch of the cheaper Switch Lite while also noting the December launch in China — though that’s unlikely to be a major factor yet. The 3DS, meanwhile, is now officially a non-factor with just 260,000 consoles sold even in a holiday quarter.
Samsung released its fourth-quarter and full-year 2019 earnings report on Thursday morning (thanks to the time difference, we are writing about Thursday morning's news on Wednesday evening in the states). For the quarter, which includes the holiday shopping season, the manufacturer took in 59.88 trillion Korean Won ($50.57 billion USD), a small 1% year-over-year gain. Operating profit for the period amounted to 7.16 trillion Korean Won ($6.05 billion USD), down 34% from the same quarter in 2018.
For all of 2019, Samsung generated revenue of 230.40 trillion Korean Won ($194.55 billion USD). That was down 5.5% on an annual basis. For all of last year, Samsung saw its operating profit decline a sharp 52.8% to 27.77 trillion Korean Won ($23.44 billion USD). The mobile division saw a 7% rise in revenue and a 67% gain in operating profits for the fourth quarter. For 2019, that division saw revenue rise 6.5% while operating profits declined 8.9%.
Samsung's mid-range Galaxy A series keeps profits up in the mobile division during the fourth quarter
During the fourth-quarter, Samsung ran into the same issues that affected it for most of last year. A drop in memory chip prices negatively impacted the company. DRAM prices continued to drop during the fourth-quarter even though the number of chips being shipped rose. Earnings for this segment increased sequentially leaving some hope of a sustained turnaround. In the display panel segment, Samsung suffered from weak demand for premium mobile device screens and more red ink spilled in the large panels business. These results were partially offset by improving memory chip demand for servers and mobile devices, and what the company characterized as "solid" sales of flagship Galaxy phones. However, profits from smartphones declined quarter-to-quarter as more time passed since the August 23rd release date of the Galaxy Note 10 series.
Samsung's sales and operating profits broken down by division
While fourth-quarter smartphone and tablet demand increased during because of the holiday shopping season, revenue declined on a sequential basis. Despite the drop in gross, profits held up thanks to solid sales of the mid-range Galaxy A series and effective use of marketing.
The Samsung Galaxy Note 10+ 5G
Samsung expects sales of memory chips and OLED panels to suffer from seasonality during the typically weak first quarter. For the three months from January through March, Samsung sees "steady" performance of its mobile business thanks to the release of the new flagship Galaxy S20 line. This includes the Galaxy S20, Galaxy S20+, and the Galaxy S20 Ultra and the latter could easily be the best Android phone for the first half of the year. In addition, Samsung will also release its new foldable Galaxy Z Flip which opens and closes around the horizontal axis. Unlike the Galaxy Fold, the Galaxy Z Flip isn't supposed to turn from a phone into a tablet; instead, this is a pocketable device that opens to reveal a 6.7-inch screen when needed. Offsetting these releases will be the extra marketing costs that Samsung will be paying for once these new handsets are introduced.
For all of 2020, Samsung is calling for a gradual improvement in the memory chip market. The company says it isn't clear yet whether the growth in 5G phone production will have a positive effect on the demand and price of DRAM memory chips. Exciting times are ahead for Sammy's foundry business as the company looks to churn out more 5nm and 7nm EUV chips. Samsung will also start to develop its next-generation 3nm GAA (gate-all-around) technology. These numbers refer to process nodes used to manufacture integrated circuits and relate to the number of transistors that fit in a small dense space. A smaller number means that more transistors fit inside; more transistors inside a chip makes it more powerful and energy-efficient. For example, the 5nm chips being produced this year will perform better using less power than 7nm chips and 3nm chips will take smartphones up another level.
For 2020, Samsung forecasts that its mobile business will see improved profits due to higher sales of premium 5G models and its foldable devices. The company adds that while demand will rise for 5G handsets, competition will rise as well. Rival manufacturers will catch up to Samsung by using more powerful chipsets, memory chips, and cameras. Samsung will look to differentiate its high-end models from competitors by expanding support for 5G and using new foldable designs.
Investors dumped Samsung's stock following the release of the report. In Korea, Samsung's shares declined 2.88% to 57,400 Korean Won ($48.46 USD).
Apple plans to release several new products in the first half of 2020, including Ultra Wideband tags, high-end wireless headphones, a 4.7-inch iPhone, refreshed iPad Pro models, and refreshed MacBook Pro and/or MacBook Air models, according to the latest forecast from well-known Apple analyst Ming-Chi Kuo.
"We forecast that Apple's major new hardware products in 1H20 include the 4.7-inch LCD iPhone, iPad Pro, MacBook Pro/Air, smaller wireless charging mat, UWB tag, and a high-end Bluetooth headphone," wrote Kuo in a research note with TF International Securities, a copy of which was seen by MacRumors.
Our insight on these products:
4.7-inch iPhone: Apple is widely rumored to be planning to release a new low-cost iPhone with a similar design as the iPhone 8, including a 4.7-inch LCD display and a Touch ID home button, but with a faster A13 chip and 3GB of RAM. The device is expected to launch by the end of March, with pricing predicted to start at around $399 in the United States.
MacBook Pro/Air refresh: It is unclear if Kuo is referring to the possibility of either of a new MacBook Pro or MacBook Air or both, but previous rumors suggest that a 13-inch MacBook Pro with a scissor switch-based Magic Keyboard will launch in the first half of 2020, following in the footsteps of the 16-inch MacBook Pro last October. Apple last refreshed the MacBook Air in July 2019 with a True Tone display and a lower $1,099 starting price.
Farther out, Kuo said the worst scenario for Apple related to the new coronavirus outbreak would be postponing the qualification and mass production schedules for new products in the second half of the year.
"If there are no significant improvements regarding the coronavirus epidemic in the foreseeable future, we predict that Apple may delay new material adoptions or lower test requirements for components to shorten qualification processes and launch new products in 2H20 on schedule, and the lower spec will likely hurt the ASP of materials or components," wrote Kuo.
After teasing a 5.1 surround sound solution with the introduction of wireless speakers in 2018 and a soundbar in 2019, Roku is finally doing the thing. If you already own a Roku Soundbar you’ll be able to add additional speakers and a subwoofer for a 5.1 surround sound experience. More importantly, it will actually be super easy to set up and cost half as much as a similar system from Sonos.
Once you’ve experienced a 5.1 surround sound setup, it’s tough to go back to your TV’s built-in speakers, or even just a soundbar. But right now, 5.1 systems are split into three categories. The first is the cheap box systems like what you can get from Vizio. Soundbar, sub, and satellite speakers are all included in the box. Set them all up, tinker a little, and you have decent 5.1 surround. Or you can spend a lot of money ($1,000 or more) and build out your own system with a wide range of speakers, amplifiers, and an AV receiver. Home theater enthusiasts love this setup because it’s infinitely customizable and will sound great, but it’s also time-consuming to set up and really, really pricey.
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Finally, there’s...Sonos. Sonos has cornered the market on easy to set up 5.1 systems that you can build up at your own speed and that will sound as good as the big fancy custom setups. But Sonos is not cheap. It’s nearly $1,600 for a Sonos soundbar, sub, and two satellite speakers. Sure you can spread out that cost into more agreeable chunks—a $600 sub here, a $200 satellite speaker there, but it’s still costly.
Roku is hoping to do the same thing...only at a price more people would be willing to pay. First, you’ll need the soundbar. That’s required, and $180. You can get the sub at the same time which brings the cost up to $300 total. Or you can buy it separately for $180. Then it’s time to buy the speakers. They come as a pair for just $200. That means a total setup is $500 to $560, depending on whether you buy the sub with the soundbar or not.
Roku’s setup is more than $1,000 less than Sonos’s. There are caveats, of course. You’re relying on the Roku ad factory to effectively subsidize the cost of your system. Roku’s wireless audio system won’t let you stream music directly from the internet as the Sonos system will, or optimize audio for the room you’re in. There’s also no built-in Alexa or Google Assistant as you’ll get with the Sonos One speakers.
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As for how much you’ll compromise on audio quality...I’m not sure yet. To get a good understanding of how one system compares to the other, you need to listen to them side by side. I didn’t get that opportunity when I checked out the Roku system back at CES. A Roku representative played a demo reel of films for me, which sounded nice and seemed to give some clear distinction between the left and right rear channel—though the three separate channels the soundbar handle didn’t have quite as much distinction. Then the rep played a clip of Billie Eilish’s “Bad Guy,” which seemed to sound as rich and bass-heavy as when I listen to it while wearing a great pair of headphones.
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A Roku rep continued to walk me through the setup process for speakers. As with all things Roku, it was incredibly simple: You turn on the speaker, navigate to the setup menu in the soundbar’s built-in Roku, and choose the speaker you want set up. You still have to deal with the garish and outdated UI that Roku is known for, but overall I get the appeal—even if I would like to spend more time with the system before I go calling it a Sonos killer. Roku appears to have crafted a very affordable and very clean-operating 5.1 surround sound system that can be built at your leisure and set up with little fuss.
A software update allowing the various speakers to work together as a surround-sound system will come to Roku boxes in an update in February. In February you’ll also be able purchase much cheaper versions of all four speakers from Walmart under the Onn brand. The Onn-branded Roku soundbar will retail fro $130, the sub for $130, and a pair of wireless speakers will cost $150. That means a total system will cost just $410...provided you’re OK with buying your speakers at Walmart and don’t mind the Onn branding.
Code discovered in the latest version of the Google Phone app has revealed more details about its unannounced call recording feature, 9to5Google reports. Most intriguing is a snippet of code that suggests the upcoming feature addition could also support call transcription, which would be similar to the Recorder app that the company debuted on the Pixel 4. XDA Developershas since managed to get the call recording feature partially working on a Pixel 4, but not transcriptions.
The newly uncovered code also gives us an idea of how Google is attempting to overcome the “security and privacy implications” that prevented call recording from being included in Android 10. Code snippets suggest that the app will warn you to comply with local laws while using the feature, and it also plays a short audio clip to warn participants when a call is being recorded.
Recorded calls can reportedly be played back from the call log according to XDA Developers, and can also be exported as .wav files if you want to listen to them elsewhere.
What’s still unclear is when the new functionality could launch. However, a big new feature like this feels like a prime candidate for one of the new “feature drops” that Google is promising to provide for its Pixel handsets. The Google Phone app is currently the default dialer app on Google Pixel, Android One, and Xiaomi’s European smartphones.
Update January 29th, 7:40AM ET: Updated with firsthand impressions from XDA Developers.
Apple could soon launch a new version of its Powerbeats earbuds if imagery discovered in the latest version of iOS by MacRumors is to be believed. The Powerbeats are Apple’s semi-wireless earbuds. The two earbuds are connected together by a single cable but connect wirelessly to a phone over Bluetooth. The last version of these earbuds were the Powerbeats 3, released in 2016.
From the icon, the biggest change with the Powerbeats 4 appears to be their cable location. While the Powerbeats 3’s cables descend from the front of the earbuds while you’re wearing them, the Powerbeats 4’s seem to descend from the back, down from the arms that hook over your ears. MacRumors also notes that they’re likely to include Apple’s latest H1 chip, and should offer support for the “Hey Siri” and “Announce Messages with Siri” features.