Samsung Electronics reported its first quarter financials and while total revenue declined 7.6% from the previous quarter due to the effects of the COVID-19 pandemic, revenue increased year-over-year and some positive traction was gained in the 5G market.
However, that traction may be fleeting.
The impact of the coronavirus that has led to people staying inside, social distancing and the closure of retail stores is bound to take a significant hit on future 5G sales and the roll out of future 5G infrastructure.
That said, Samsung will continue to push 5G smartphones and electronics that power these devices despite a great level on uncertainty in the market. Here are five predictions for the remainder of the year from the Korean electronics giant.
1) Samsung plans to launch several new premium 5G smartphones and expanded mid-range models for the mass market.
2) The launches of these new 5G smartphones will boost Samsung’s market for 5G system-on-chips (SoCs). 5G mobile processors were already in demand prior to the outbreak of COVID-19, but after the impact of the pandemic, a contraction in mobile processors is expected. Samsung plans to minimize the impacts to the mobile processor market by expanding the 5G SoC and image sensor markets.
3) Due to the coronavirus pandemic, Samsung saw a decline in overall smartphone shipments in the first quarter, but, due to an increasing mix of 5G phone sales, Samsung was able to maintain its profitability. The sales of 5G smartphones also boosted Samsung’s average selling prices (ASPs) across all lines.
4) Looking ahead to the second half of 2020, the uncertainty of how long COVID-19 will impact the public globally (including store closures) as well as increased market competition for 5G smartphones will lead to a decline in sales, Samsung said.
5) There is an incredibly good possibility that the expansion of 5G commercialization in South Korea will suffer either a delay or cutback in 5G investment due to the impact of COVID-19.
Meanwhile, Strategy Analytics released its list of first quarter 5G leaders with Samsung climbing to the lead shipping 8.3 million 5G smartphones globally in the first quarter. The global market for 5G smartphone shipments grew to 24.1 million, surpassing the number of 5G phones shipped during the full year in 2019, which was 18.7 million.
Chinese smartphone vendors rounded out the rest of the Top 5 companies selling 5G smartphones in the first quarter with Huawei in second, Vivo in third, Xiaomi in fourth and Oppo in fifth. Despite the COVID-19 pandemic and a shut down of many manufacturing facilities in China, the country was the undisputed leader in demand for 5G smartphones although the technology is growing in popularity in South Korea, the U.S. and Europe, Strategy Analytics said.
“Chinese smartphone vendors captured 61 percent of top 5 vendor 5G smartphone shipment volumes in Q1 2020, with the majority of those volumes going to the Chinese market,” said Neil Mawston, executive director at Strategy Analytics. “This reflects the speed with which Chinese operators have rolled out 5G networks, as well as the underlying demand for 5G smartphones, despite the Covid-19 pandemic that shut down large parts of China during the Q1 2020 period. As China continues to ramp up economic activity, we expect 5G shipments to this market to continue to expand dramatically in 2020.”
