Gartner: Samsung Electronics May Post Lower Profits In 2019

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Research firm Gartner recently claimed that Samsung Electronics could post lower profits in 2019. The South Korean giant has been on a roll lately, with its latest projections setting the company up to post its highest ever profits. As well as this, if the company meets its projection of $12.11 billion, it could also beat Apple's profits for the first time in the smartphone era.

While things certainly show no sign of slowing down at the moment, according to Gartner, 2019 may be the year Samsung's profits start to fall again. Currently, the memory chip market is seeing a significant boom which is the main driving force behind the company's high profits. By 2019, though, the memory market is set to become more saturated and many new firms, mainly based in China, are set to enter the market, something that will gradually eat away at Samsung's profits, Gartner speculates. The reason behind the current bubble in the market causing the increase in profits supposedly pertains to the recent shortage of chips, as it appears companies such as Samsung raised their prices in order to take advantage of the situation. By 2019, though, with an increased number of competitors, as well as an increase in supply from current competitors, Samsung could be forced to lower its prices in order to stay competitive, so maintaining its high profit margins could prove to be an extremely difficult task for the conglomerate.

Until then, though, it appears Samsung's gains will carry on into next year. The South Korean giant may even be set to beat Intel and become the largest chip manufacturer in the world for the first time ever. Once the bubble in the market pops, though, it will certainly be interesting to see how Samsung handles the situation. Such a scenario could possibly lead to a lengthy period of low profits, similar to what happened when the smartphone bubble eventually crashed. Nonetheless, the company has likely learned from its mistakes in the past and should be better prepared for the situation. An update on Samsung's performance in the chip industry and the tech giant's other endeavors should follow later this year.

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