2019 may have only just started, but some companies are already forecasting a rather gloomy outlook for the year. Two high-profile ones in fact, with Apple and now Samsung noting that they could suffer sales slumps over the course of 2019.
Interestingly though, each manufacturer cites different reasons for the lacklustre 2019 sales projections.
Apple was the first to make investors aware that 2019 may not be a banner year. CEO Tim Cook addressed the issue with a press release last week in which he cited the fact that fewer iPhone upgrades had occurred during the past fiscal quarter than anticipated. This then prompted Apple to revise its projections for Q1 2019.
Cook adds that China in particular, as well as a few key developed markets did not have the demand for Apple mobile devices as was initially anticipated.
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” the Apple CEO explains.
Apple’s revised projections for Q1 2019 will see an estimated $9 billion drop in revenue, with the rest of the year likely following a similar trend if Apple is not able to turn around the demand situation in key markets.
As for Samsung, the South Korean company this week issued a warning to investors. The company revealed its earnings guidance for Q4 2018, with it expected to be down 11 percent compared to the previous year-on-year quarter.
While the company did not pinpoint the precise reason for the relatively poor showing, especially considering how well it performed in the quarters that preceded this latest one, there seem to be two main reasons for the shortfall.
Speaking to industry experts, CNBC, says that demand in the company’s memory products have declined drastically, which has also been coupled with ever-intensifying competition in the mobile market.
“What’s happening is that memory demand has really fallen off a cliff in the fourth quarter,” noted Mark Newman, managing director at Sanford C. Bernstein, to CNBC.
How Apple and Samsung will look to correct their respective ships for the remaining quarters of 2019 remains to be seen.
As such, it could open up opportunities for ambitious Chinese firms like Huawei and OnePlus to try to claim a larger market share in 2019, at least when it comes to the mobile market.[Image – CC 0 Pixabay]