Samsung Downgrades Profit Forecast

Samsung has found itself in a perfect storm of bad news and the result is an almost 60% reduction in profits for the second quarter of this year.
The tech giants policy of diversification as a hedge – not being encumbered to a specific piece of technology but striving for domination in multiple sectors – has come under pressure as smartphone sales boomed and the focus inevitably moved to portable technology. This is where the storm comes in. Thanks to the battles going on in mobile technology, most notably from Apple and Samsung, consumer expectations as to what constitutes a good phone and what it means to bring out a new phone, have meant the cost per unit manufacturing expense and gone through the roof and despite soaring costs to consumers, the margins that used to be the cornerstone of the sector are simply no longer there.
Now, thanks to the so-called ‘trade war’ between Chine and the United States, the costs associated with selling devices are souring also. This means that where mobile technology used to prop up the Samsung divisions that were lagging, the reverse is no true.
The real challenge for Samsung is that its only strategy can be to hope the trade issues end soon. After all, they can’t start removing technology now, it’s a situation that they and they ilk – mostly in competition with Apple – have created on their own, and it will take a skilled skipper to get them through the storm unscathed.