SEOUL: Samsung Electronics expects a recovery in demand for smartphones and consumer electronics to underpin profits in the second half of the year, after the coronavirus disease (COVID-19) saw a shift to online working boost quarterly earnings.
It tempered its relatively upbeat forecast when announcing second quarter results on Thursday with a warning that the pandemic and trade disputes posed ongoing risks for earnings.
Samsung posted a 23 percent jump in operating profit in the April-June quarter on the back of strong DRAM memory chip sales to online server providers, along with cuts in marketing costs.
Prices for the chips, which create temporary workspaces to allow devices to multitask, spiked in the second quarter as people shifted to working and learning online from home because of the pandemic. Samsung’s Korean peer SK Hynix and US firm Micron Technology Inc. also benefited from the trend.
Operating profit at Samsung’s chip business surged 60 percent to 5.43 trillion won in the second quarter, accounting for two thirds of its total 8.1 trillion won profit.
Samsung said it expected server demand for chips to remain solid for the remainder of the year and a boost in smartphone demand, given planned product launches and anticipated demand for 5G-capable phones.
Still, Samsung and other Asian tech companies in the global supply chain have been rocked by trade tensions between the United States and China that has put cross-border trade in components, devices and technology at the mercy of politics.
“Given many uncertainties including COVID-19, trade tension and that customers may change their inventory and investment strategies, it’s still difficult to say when (DRAM) price will hit an inflection point,” senior vice president of memory business Han Jin-man said.
The company would keep a close eye on chip inventory levels at data center firms who stockpiled in the first half to meet telecommuting demand, he said.
SK Hynix and some analysts have painted a more downbeat outlook, expectating a fall in DRAM chip prices.
“Demand for the second half ... will be relatively weak ... but it’s not going to be a hard landing as the market had feared,” said Choi Young-san, analyst at E-Best Securities.
Quarterly operating profit in Samsung’s mobile division rose 25 percent to 1.95 trillion won. Total revenue dropped 6 percent to 53 trillion won.
During the quarter, China’s Huawei overtook Samsung as the world’s biggest seller of phones, shipping 55.8 million devices to Samsung’s 53.7 million, according to research firm Canalys.
Huawei’s rise was spurred by sales in China, where fresh COVID-19 cases are low, but Samsung is likely to gain back market share as demand in other countries recover.
Samsung plans to unveil new flagship smartphones, including the Galaxy Note and a foldable phone in the second half, as well as expand sales of mid-tier models.
Samsung also said its display business, which makes screens for mobile phones, TVs and monitors and counts Apple Inc. as a customer, is expected to improve late this year as set makers launch new products to meet demand from lockdowns easing and people shopping for year-end holidays.
Samsung: Smartphone demand to drive second half earnings
https://arab.news/53gwg
Samsung: Smartphone demand to drive second half earnings
- Huawei’s rise was spurred by sales in China, where fresh COVID-19 cases are low, but Samsung is likely to gain back market share as demand in other countries recover
AI will never replace human creativity, says SRMG CEO
- Speaking to Maya Hojeij, senior business anchor at Asharq with Bloomberg, Jomana R. Alrashid expressed pride in SRMG platforms that had absorbed and adopted AI
RIYADH: Jomana R. Alrashid, CEO of Saudi Research and Media Group, highlighted how AI cannot replace human creativity during a session at The Family Office’s “Investing Is a Sea” summit at Shura Island on Friday.
“You can never replace human creativity. Journalism at the end of the day, and content creation, is all about storytelling, and that’s a creative role that AI does not have the power to do just yet,” Alrashid told the investment summit.
“We will never eliminate that human role which comes in to actually tell that story, do the actual investigative reporting around it, make sure to be able to also tell you what’s news or what’s factual from what’s wrong ... what’s a misinformation from bias, and that’s the bigger role that the editorial player does in the newsroom.”
Speaking on the topic of AI, moderated by Maya Hojeij, senior business anchor at Asharq with Bloomberg, the CEO expressed her pride in SRMG platforms that had absorbed and adopted AI in a way that was “transformative.”
“We are now translating all of our content leveraging AI. We are also now being able to create documentaries leveraging AI. We now have AI-facilitated fact-checking, AI facilities clipping, transcribing. This is what we believe is the future.”
Alrashid was asked what the journalist of the future would look like. “He’s a journalist and an engineer. He’s someone who needs to understand data. And I think this is another topic that is extremely important, understanding the data that you’re working with,” she said.
“This is something that AI has facilitated as well. I must say that over the past 20 years in the region, especially when it comes to media companies, we did not understand the importance of data.”
The CEO highlighted that previously, media would rely on polling, surveys or viewership numbers, but now more detailed information about what viewers wanted was available.
During the fireside session, Alrashid was asked how the international community viewed the Middle Eastern media. Alrashid said that over the past decades it had played a critical role in informing wider audiences about issues that were extremely complex — politically, culturally and economically — and continued to play that role.
“Right now it has a bigger role to play, given the role again of social media, citizen journalists, content creators. But I also do believe that it has been facilitated by the power that AI has. Now immediately, you can ensure that that kind of content that is being created by credible, tier-A journalists, world-class journalists, can travel beyond its borders, can travel instantly to target different geographies, different people, different countries, in different languages, in different formats.”
She said that there was a big opportunity for Arab media not to be limited to simply Arab consumption, but to finally transcend borders and be available in different languages and to cater to their audiences.
The CEO expressed optimism about the future, emphasizing the importance of having a clear vision, a strong strategy, and full team alignment.
Traditional advertising models, once centered on television and print, were rapidly changing, with social media platforms now dominating advertising revenue.
“It’s drastically changing. Ultimately in the past, we used to compete with one another over viewership. But now we’re also competing with the likes of social media platforms; 80 percent of the advertising revenue in the Middle East goes to the social media platforms, but that means that there’s 80 percent interest opportunities.”
She said that the challenge was to create the right content on these platforms that engaged the target audiences and enabled commercial partnerships. “I don’t think this is a secret, but brands do not like to advertise with news channels. Ultimately, it’s always related with either conflict or war, which is a deterrent to advertisers.
“And that’s why we’ve entered new verticals such as sports. And that’s why we also double down on our lifestyle vertical. Ultimately, we have the largest market share when it comes to lifestyle ... And we’ve launched new platforms such as Billboard Arabia that gives us an entry into music.”
Alrashid said this was why the group was in a strong position to counter the decline in advertising revenues across different platforms, and by introducing new products.
“Another very important IP that we’ve created is events attached to the brands that have been operating in the region for 30-plus years. Any IP or any title right now that doesn’t have an event attached to it is missing out on a very big commercial opportunity that allows us to sit in a room, exchange ideas, talk to one another, get to know one another behind the screen.”
The CEO said that disruption was now constant and often self-driving, adding that the future of the industry was often in storytelling and the ability to innovate by creating persuasive content that connected directly with the audience.
“But the next disruption is going to continue to come from AI. And how quickly this tool and this very powerful technology evolves. And whether we are in a position to cope with it, adapt to it, and absorb it fully or not.”
