Samsung also suffers as smartphone sales slump in China

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Samsung Galaxy Note 8
Apple isn't the only one suffering in China.
Photo: Killian Bell/Cult of Mac

It turns out Apple isn’t the only smartphone maker that’s suffering from falling sales in China. Samsung, one of the iPhone’s biggest rivals, is also expected to follow Apple in confirming lower than anticipated revenue for the fourth quarter of 2018.

The South Korean company’s warning, which will reportedly come on Tuesday, will reveal a 12 percent fall in year-on-year operating profit for the three-month period. Revenue is also expected to drop 5 percent.

The iPhone’s rising price tag isn’t the only thing holding it back. In a letter to investors last week, Apple CEO Tim Cook listed a number of reasons why sales have slumped — one of which is its struggle in China, where smartphone sales fell around 8 percent last quarter.

Apple is one of a number of companies that are suffering. Samsung is another taking a beating in the world’s second-largest smartphone market, and it’s not just its handset business that’s getting bruised.

Samsung will warn of falling profits this week

Samsung is also one of the world’s largest suppliers of memory chips and semiconductors. So even though Samsung phones only make up 1 percent of the Chinese smartphone market — compared to Apple’s 9 percent — it is also seeing declines elsewhere.

Samsung’s operating profit will fall to 13.3 trillion won (approx. $11.85 billion) for the fourth quarter of 2018, largely as a result of lower memory chip and processor shipments, according to the South China Morning Post.

Samsung’s chip business alone reportedly saw a 3.7 percent decrease in shipments year-over-year, while its memory business suffered a 10 percent decline during the same quarter. Exports to China are said to have dropped for the first time in over two years.

It doesn’t look good for Samsung

Unfortunately for Samsung, the report states that its profits will continue to fall during 2019, despite adjustments in memory pricing.