Samsung‘s first-quarter financial performance is expected to decline compared to the same period last year due to weak iPhone X sales and a number of other factors, The Korea Herald’s Investor reports, citing a number of industry analysts. The Seoul-based original equipment manufacturer recorded a $14.1 billion profit in Q1 2017 but is unlikely to repeat that achievement over the current quarter, with IBK Investment & Securities predicting its display business to weigh it down. While Samsung committed significant resources and manufacturing capacities to supplying the OLED panels for Apple’s latest iOS flagship, the poor commercial performance of the iPhone X is now likely to cost it in the near future, some analysts believe.
Samsung’s semiconductor unit has been its main growth generator in recent years and while it’s expected to maintain its momentum over the current quarter, a number of industry watchers remain skeptical about its ability to do so in the long term. Added competition and weaker demand in the global market are likely to soon drive down the prices of flash memory chips and consequently impact Samsung’s bottom line, according to previous predictions. Worldwide smartphone sales and shipments are also stagnating, as numerous industry trackers show, and while Samsung is still increasing its profits by ramping up the average selling price of its handsets, such a strategy isn’t expected to work for long less global demand recovers in the near future.
Samsung may pursue new mergers and acquisitions in an extremely aggressive manner over the course of this year, with the company’s de facto leader Jay Y. Lee recently being released from prison after a year of absence following his arrest and subsequent trial based on allegations of bribery and corruption. With Mr. Lee now back at the helm, Samsung’s corporate structure is once again complete enough to allow for bold M&A bets, as has been the case in the last decade when the company made significant risky investments in the industries that are now driving its growth. The firm’s next financial report is expected to be published in late April.