It seems there are huge challenges across markets last quarter: Samsung is providing a depressing guidance. The semiconductor giant noted that its fourth-quarter revenue shrank 11% and operating profit declined 29% from the year before. It explained that slow demand on memory chips and “intensifying competition” for phones were to blame. LG was not spared: its profits plummeted 80% with revenue down 7%.
Samsung Electronics Co. expects its fourth-quarter operating profit will decline 29%—surprise guidance that fell far below analysts’ estimates—in the latest sign of challenges hitting the tech industry.
The world’s largest maker of smartphones and semiconductors said its estimated profit decline comes “amid mounting macro uncertainties.” The Suwon, South Korea-based company pointed to “lackluster demand” for memory chips and “intensifying competition” in its handsets business.
So, the challenges noted by Apple CEO Tim Cook in his letter may not be just Apple; this seems like a big-brand problem. Most affordable device brands have gotten so well that people have real alternatives as they work to save money. Samsung captures that excellently when it noted that “intensifying competition” in its handsets business is a key reason its revenues and profits are dropping.
Do not look far: the Tecno phones of this world are part of this redesign. They give you fair quality on price, and you can just live with them, sparing you from the overpriced brands and their fashionista troubles.
Apple pivots into a fashion company, in the likes of Louis Vuitton, with the launch of iPhone X today. It costs $999, heavy on fashion elements, but hardly moves the technology trajectory. But that does not matter, because it is Apple. The world will cover it for free, and Apple will enjoy a great earned media. From CNN to NBC to Nigeria’s AIT, the message will be the same: there is a new product from Apple.
This is all good as I expect the next generation of iPhone and Samsung Galaxy to be priced for the earth and not galaxies. As that happens, they would bring competition back to the affordable brands like Tecno and Infinix. And at the end, customers win, and phone-anchored mobile internet revolution continues in places like Africa.
---Replay of Tekedia Business Webinar videos now available. Visit page here.
---Visit our Store for my books, cases, notes, etc. Now, enjoy our consolidated subscription for all contents (past, present and future).
-- We offer Advisory Services (tech, strategy & Africa).