Technology Market Under Stress Owing To Growing Macroeconomic Uncertainties

Jan-2019 | Extense Research | Technology

Samsung significantly reduced its quarterly forecast for the Q4 on Tuesday as demand for smartphones and memory chips went down. The world's largest smartphone maker reported operating income of $9.7 billion, down nearly 29 percent from a year earlier. Analysts had anticipated a profit of over $13.5 Billion. South Korea's tech giant attributes its profit in free fall to increased competition in smartphones and growing pressure from mounting macroeconomic uncertainties.

The company said the low demand for memory chips is a concern. Memory chips sum up to most of the company's earnings and more than a third of sales. Samsung said that the sale of memory chips should get better with the launch of new smartphones. Samsung's news comes just a week after Apple's gloomy forecasts, which slashed its sales projection for the first time in 15 Years due to the slowness in iPhone sales in China, as per the statement by CEO Tim Cook.

On the other side, Apple's share dropped by 10% and stunned the technology industry and global markets as they struggled to itemize the hazard of slowing the Chinese economy. Out of all the sectors most affected by China, threatened by the trade disputes of US President Donald Trump, and by an imminent delay previously untouched technology stocks were strike hard in current months, the NASDAQ has dropped 17% since the peak reached in August.

Samsung has accomplished record profits in the last 18 Months thanks to the smart device boom around the world, but demand for smartphones has dropped dramatically in recent months. Shipments of the company fell more than 13% in the last quarter compared to previous year, as per the data from International Data Corporation.

Samsung is forecasting lower operating profit for the Q4, while the maker of smartphones and memory chips faces tougher competition and more modest requirement for chips.