Samsung's smartphone business isn't doing great, but 2019 could turn things around

(Image credit: Android Central)

Samsung's smartphone business is definitely the most public example of its growth and success over the past 10 years, but it's certainly not the most profitable. That falls to the company's memory division, which supplies DRAM modules for most smartphone makers, including Apple.

Well, as we know, Apple's been experiencing some struggles of its own in recent months, warning of an multi-billion-dollar revenue shortfall due to slowing iPhone sales. Samsung is Apple's biggest provider of memory chips, and thanks to languidness in that particular market — the economic slowdown in China is affecting everything, including how much companies are willing to pay for DRAM — its bottom line is being affected mightily.

According to Bloomberg, Samsung is expected to announce fourth-quarter earnings much weaker than analysts initially predicted, missing profit targets for the first time in years. Things should return to relative normalcy in the second half of 2019, but in the meantime, it's looking to its phone business to give its bottom line a boost in the meantime. That responsibility falls to the Galaxy S10 series, which is expected to debut at Mobile World Congress at the end of February, and the upcoming foldable Galaxy X (or whatever it ends up being called), which should debut in the first half of 2019.

Then there's the 5G question — Samsung has pre-announced that it's bringing 5G phones to every major U.S. carrier in 2019. While total numbers are likely to be low, the average cost of a 5G phone is expected to be higher than the average flagship Android handset, which in this environment could go as high as $1500. Whether Samsung's first 5G devices will be variants of the S10 or something else altogether remains to be seen, though.

It's unlikely that Samsung will be able to make back the shortfall in its memory division through smartphones alone, despite a year that's expected to see huge innovation in, and increased demand for, the smartphone ecosystem. But given that even being heralded as some of the best phones of 2018, and Samsung's best ever, the S9, S9+ and Note 9 didn't sell in numbers that Samsung was happy with, 2019 will likely be a growth year for the South Korean giant in general.

Daniel Bader was a former Android Central Editor-in-Chief and Executive Editor for iMore and Windows Central. 

16 Comments
  • We can say that in 2020, 2021, 2022.......
  • Of course it couldn't possibly have anything to do with raising prices the last couple of cycles. Nah it's all these other reasons. In case nobody has noticed 50% of the American population is having problems consuming the many products of business and industry. But yeah great timing on the price hike.
  • Yes, almost everyone went nuts on prices for 2018.
  • Exactly. The prices got way out of hand, the lower priced phones do 95% of what a flagship does, often with far superior battery life. As somebody who used to go nuts for the newest and greatest, I personally took myself out of that market in 2018.
  • I tens to wait until the NEXT flagship or two come out then buy the older ones much cheaper. Had I been paying attention, I'd have bought an s7 while the gettin was good when the s9 cane out. As it stands I bought an s9 because the s8 was barely any cheaper. Unless it blows up I don't see replacing this one any time soon
  • Smartphones are so good now, people are holding on to what they have. There is no incentive to upgrade anymore, no matter the price. I'd rather go on vacation than buy a new device which does almost the exact same thing my current device does, and my last one did before that. Until companies can compel again with new ways to use a smartphone, sales will continue to be flat.
  • The one thing I really want is 5G. After that, I don't much care.
  • Smartphones have hit a wall... gimmicky features are not enough to justify the hefty price tags for flagship devices.
  • I agree with that 💯
  • $1500...jaw drops, but not dropping my 9+ because I have to keep that thing in good condition. I may need it for awhile.😃
  • That's why the US wanna ban Huawei, cause they will kick apple and Samsung's ass even more and can't let that happen looll But for real though, its totally normal. A few years ago there was no OnePlus, Xiaomi, Huawei and Android was still maturing. Back then it was all about Samsung, some LG and HTC but not much competition. Today Android is fully mature, there are tons of oem coming out with solid devices at affordable process and that eats away the sales of Sammy and apple. That is not gonna stop anytime soon especially for Apple, dropping phones that cost $1500 when you can get 3 OnePlus at the same price or get a 2 solid flagship phones door the price. I love it!
  • No, it's Huawei networking backbone hardware ban that has the endorsement of Western nations top five intelligence agencies. Huawei doesn't have any deeper wholesale discounts to offer American carriers, so they said no to Huawei. The phones are widely available in the UK and Canada.
  • I'm a Samsung buyer... But I'm at least two years from wanting to replace my Note 8, if not five years if I replace the battery next year. Samsung is not immune to what hit Apple. To paraphrase an article on the first foldable phone you can buy (announced not by Samsung at CES).... "Models heavily reliant on re-marketing annually modified products are not going to sell well." No average user is going to spend over $1000 for a tiny bit better camera or for a clever front display way to unlock a phone... I mean, that's all the Samsung S10 has to offer over the S9. PS. The foldable phone is by Royole, and it's $1300 USD, lol.
  • I used to upgrade every year but gonna do it every 2-3 years, my Note 8 is still going strong we shall see what the Note 10 brings to the table
  • Same. Plus I hate to be THAT guy, but the hole punch bothers me as much as a notch. Had to say it.
  • A hole punch in usable screen is better than a bezel.