It’s strange to refer to Samsung’s revenues while talking at the same time about its rival’s best product, the iPhone X, but the Korean tech giant is an important component supplier for Apple’s flagship.
Circuit board, memory chips, batteries and most important, the OLED panels iPhone X is equipped with. So, slow business for Apple is slow business for Samsung, to.
Analysts forecast that Apple’s disappointing iPhone X sales would weigh down on Samsung Electronics’ display business.
“Reduced supply orders for the iPhone X and the strong Korean won are expected to cause Samsung’s revenue in the first quarter to drop by 4 percent to 63.4 trillion won,” said Noh Geun-Chang, an analyst from HMC Investment Securities, in a report.
He also expected that Samsung Display, the display subsidiary of Samsung Electronics and the sole supplier of OLED displays for Apple, will see its profit margin drop significantly through the second quarter this year as a result of Apple’s decision to cut the production of the iPhone X by 40 percent from the previous quarter.
Other analysts here also painted a grim outlook on Samsung, saying the negative impact stemming from the weak demand for AMOLED, used for the upper-end iPhone, is inevitable.
Kim Sun-woo, an analyst from Meritz Securities, anticipated that Samsung’s profits will be back on the upward trend after a drop in the first three months this year.