Samsung Electronics expects the global smartphone market to contract this year due to the COVID-19 outbreak, while predicting that demand for 5G handsets will continue to grow, the company said at its annual shareholders' meeting on Wednesday.
"We expect this year's smartphone market to contract from the aftermath of the COVID-19 outbreak, but demand for 5G smartphones will grow," said DJ Koh, Samsung's co-CEO who oversees its mobile and network businesses.
The company announced at the meeting it would expand its 5G lineup beyond flagship models to its mid-tier A series as well.
Budget smartphones have been experiencing fast growth in emerging markets, the co-CEO added, saying the company will launch new models at various price points, promote upselling, and increase operational efficiency to secure profits.
The conglomerate also expects growth in its semiconductor business thanks to the memory market stabilising due to increased demand from data centres. Samsung's semiconductor chief, Kim Ki-nam, said the global chip market would also grow this year due to growing demand for artificial intelligence, automobiles, and 5G.
The South Korean tech giant saw its operating profit fall by half in 2019 compared to the year prior, with the fall in memory prices being the main cause. Oversupply and the US-China trade dispute were also attributed as causes for the drop, with semiconductor prices dropping to a third of its peak at 2018.
On whether the COVID-19 outbreak has affected production, Samsung co-CEO HS Kim, who heads its consumer electronics business, told shareholders there were impacts during the early phases of the outbreak from securing components from China, but he reiterated that the company currently does not have any problems with production.
He did add however, that: "COVID-19 has somewhat subdued in South Korea but it is only just starting worldwide. We are yet to fully determine how COVID-19 will impact distribution and consumers. We will conduct research further to prepare for it".
In the TV space, Kim said Samsung hopes to further cement its leadership by rolling out 8K and new lifestyle models.
Samsung also approved the motion to name two new executive directors at the shareholders' meeting.
Around 400 shareholders showed up for Samsung's shareholders' meeting, far less than the usual number of over a thousand, due to social distancing for COVID-19. The podium for speakers was also surrounded by acrylic plates.
Physical attendees were required to wear masks and have their temperature checked before entering, Samsung said, with the company asking shareholders to use its online-voting system instead if they could not make the meeting.
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