Home / Insurance Tips / Samsung joins Apple in warning of gloomy 2016 for technology

Samsung joins Apple in warning of gloomy 2016 for technology

A Samsung Galaxy S6 edge smartphone. Samsung on Thursday warned of slowing demand and economic turbulence after its quarterly earnings missed analysts' estimates, joining Apple in foretelling a downbeat 2016 for the technology sector. Must credit: Bloomberg photo by Michael Nagle.Michael Nagle, Bloomberg

Samsung Electronics warned of slowing demand and economic turbulence after its quarterly earnings missed analysts’ estimates, joining Apple in foretelling a downbeat 2016 for that technology sector.

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The Korean conglomerate, whose quarterly profit fell short of expectations by almost 40 per cent, said the deteriorating global economy was eroding interest in computers and smartphones and depressing component prices. Samsung invested in new screen and semiconductor technologies for example foldable displays to try and boost profit, executives said on a business call.

Samsung’s warning came days after Apple – its biggest customer based on data compiled by Bloomberg – predicted its first sales decline inside a decade. Ceo Tim Cook said the organization was seeing “extreme conditions” unlike anything the world’s largest technology company had ever encountered, with economic growth in China at its weakest pace in 25 years.

“All technology companies all over the world will face a really tough industry ahead. Until the overall demand picks up, it’s a matter of how well they can hold out instead of how good they are able to battle out,” said Yoo Eui-hyung, an analyst at Dongbu Securities Co. “For 2016, since no demand growth is expected, it largely depends on how good the availability of chips and displays could be managed.”

Shares of Samsung, the world’s biggest maker of phones, displays and memory chips, finished 2.6 percent reduced Seoul. The stock has fallen more than 9 percent this year, compared with a 2.8 percent decline within the benchmark Kospi index.

The cautionary tones adopted by Apple and Samsung sent ripples with an industry whose fortunes are entwined with the market’s two leading players. Mobile component suppliers TDK Corp., Murata Manufacturing Co. and LG Display Co. slid on Thursday after Apple shares tumbled 6.6 percent.

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