In its first-quarter earnings report last week, Samsung Electronics said it expects the COVID-19 pandemic to continue impacting its business for the rest of the year, decreasing sales of smartphones and TVs, but increasing demand for PCs, servers and memory chips as people continue to work or study from home.
Samsung Electronics reported operating profit of 6.45 trillion Korean won (about $5.3 billion) for the first-quarter of 2020. The South Korean company’s revenue fell about 7.6% from the previous quarter to 55.33 trillion won (around $45.6 billion), due to a seasonal drop in demand for displays and consumer electronics, and the impact of the pandemic.
The world's largest smartphone maker, which is also a major supplier of memory chips and display screens for other manufacturers such as Apple and Huawei, said that smartphone demand "is expected to drop sharply" because of Covid-19. But the company expects the demand for its cloud services and PCs to grow as people continue to work remotely.
"The way of the future, people spending more time working and learning online, that has become the new normal for many people as a result of COVID-19," said Ben Suh, Samsung's executive vice president of investor relations according to a transcript of the earnings call by Seeking Alpha.
The "stay-at-home economy" has led to more people playing games online, shopping online and streaming movies at home, and "we think this will actually stick as a new lifestyle for consumers," Ben said.
In 2019, Samsung Electronics recorded a revenue of around 230.4 trillion Korean won (approximately $206 billion). The company has assembly plants and sales networks in 80 countries and employs more than 300,000 people. It is the world's largest manufacturer of consumer electronics and semiconductors by revenue.