Earnings

Samsung earnings: Gadget sales are slipping

People aren't buying smartphones or TVs, hurting Samsung's consumer and component businesses.

Samsung
  • Q1 revenue: $45.4 billion (+5.6% YoY)
  • Q1 earnings: $4 billion (-3.2% YoY, below expectations)
  • Full-year guidance: Samsung withdrew guidance, citing too much uncertainty.

The big number: Samsung's display business posted a $240 million operating loss, thanks to a sharp slowdown in smartphone sales. The company expects the business to stay weak in Q2, partly thanks to lower demand for TVs due to the Olympics postponement.

People are talking: "Shrinking market and store closures make a drop in earnings seem inevitable." — Samsung told investors that sales of its own-brand smartphones were going to take a hit next quarter.

Opportunities: Strength in Samsung's memory chip business made up for poor performance elsewhere. "Overall conditions in the memory industry are likely to be favorable due to server and PC demand," said Samsung chip exec Han Jin-man.

Threats: Samsung's business is very exposed to a slowdown in consumer spending. Not only does it sell TVs and smartphones directly to consumers, it also supplies components to other manufacturers. That's why the company said "overall earnings are likely to decline" next quarter, despite the memory strength.

The power struggle: COVID could slow down 5G rollouts, which could hit Samsung's network equipment business. The company warned that "5G network investments may face reductions or delays domestically and internationally." But any slowdown could be temporary, and Samsung spins it as an opportunity to improve capabilities "for the mid to long term."

Fintech

Election markets are far from a sure bet

Kalshi has big-name backing for its plan to offer futures contracts tied to election results. Will that win over a long-skeptical regulator?

Whether Kalshi’s election contracts could be considered gaming or whether they serve a true risk-hedging purpose is one of the top questions the CFTC is weighing in its review.

Photo illustration: Getty Images; Protocol

Crypto isn’t the only emerging issue on the CFTC’s plate. The futures regulator is also weighing a fintech sector that has similarly tricky political implications: election bets.

The Commodity Futures Trading Commission has set Oct. 28 as a date by which it hopes to decide whether the New York-based startup Kalshi can offer a form of wagering up to $25,000 on which party will control the House of Representatives and Senate after the midterms. PredictIt, another online market for election trading, has also sued the regulator over its decision to cancel a no-action letter.

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Ryan Deffenbaugh
Ryan Deffenbaugh is a reporter at Protocol focused on fintech. Before joining Protocol, he reported on New York's technology industry for Crain's New York Business. He is based in New York and can be reached at rdeffenbaugh@protocol.com.
Sponsored Content

Great products are built on strong patents

Experts say robust intellectual property protection is essential to ensure the long-term R&D required to innovate and maintain America's technology leadership.

Every great tech product that you rely on each day, from the smartphone in your pocket to your music streaming service and navigational system in the car, shares one important thing: part of its innovative design is protected by intellectual property (IP) laws.

From 5G to artificial intelligence, IP protection offers a powerful incentive for researchers to create ground-breaking products, and governmental leaders say its protection is an essential part of maintaining US technology leadership. To quote Secretary of Commerce Gina Raimondo: "intellectual property protection is vital for American innovation and entrepreneurship.”

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James Daly
James Daly has a deep knowledge of creating brand voice identity, including understanding various audiences and targeting messaging accordingly. He enjoys commissioning, editing, writing, and business development, particularly in launching new ventures and building passionate audiences. Daly has led teams large and small to multiple awards and quantifiable success through a strategy built on teamwork, passion, fact-checking, intelligence, analytics, and audience growth while meeting budget goals and production deadlines in fast-paced environments. Daly is the Editorial Director of 2030 Media and a contributor at Wired.
Enterprise

The Uber verdict shows why mandatory disclosure isn't such a bad idea

The conviction of Uber's former chief security officer, Joe Sullivan, seems likely to change some minds in the debate over proposed cyber incident reporting regulations.

Executives and boards will now be "a whole lot less likely to cover things up," said one information security veteran.

Photo: Al Drago/Bloomberg via Getty Images

If nothing else, the guilty verdict delivered Wednesday in a case involving Uber's former security head will have this effect on how breaches are handled in the future: Executives and boards, according to information security veteran Michael Hamilton, will be "a whole lot less likely to cover things up."

Following the conviction of former Uber chief security officer Joe Sullivan, "we likely will get better voluntary reporting" of cyber incidents, said Hamilton, formerly the chief information security officer of the City of Seattle, and currently the founder and CISO at cybersecurity vendor Critical Insight.

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Kyle Alspach

Kyle Alspach ( @KyleAlspach) is a senior reporter at Protocol, focused on cybersecurity. He has covered the tech industry since 2010 for outlets including VentureBeat, CRN and the Boston Globe. He lives in Portland, Oregon, and can be reached at kalspach@protocol.com.

Climate

Delta and MIT are running flight tests to fix contrails

The research team and airline are running flight tests to determine if it’s possible to avoid the climate-warming effects of contrails.

Delta and MIT just announced a partnership to test how to mitigate persistent contrails.

Photo: Gabriela Natiello/Unsplash

Contrails could be responsible for up to 2% of all global warming, and yet how they’re formed and how to mitigate them is barely understood by major airlines.

That may be changing.

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Michelle Ma

Michelle Ma (@himichellema) is a reporter at Protocol covering climate. Previously, she was a news editor of live journalism and special coverage for The Wall Street Journal. Prior to that, she worked as a staff writer at Wirecutter. She can be reached at mma@protocol.com.

Entertainment

Inside Amazon’s free video strategy

Amazon has been doubling down on original content for Freevee, its ad-supported video service, which has seen a lot of growth thanks to a deep integration with other Amazon properties.

Freevee’s investment into original programming like 'Bosch: Legacy' has increased by 70%.

Photo: Tyler Golden/Amazon Freevee

Amazon’s streaming efforts have long been all about Prime Video. So the company caught pundits by surprise when, in early 2019, it launched a stand-alone ad-supported streaming service called IMDb Freedive, with Techcrunch calling the move “a bit odd.”

Nearly four years and two rebrandings later, Amazon’s ad-supported video efforts appear to be flourishing. Viewership of the service grew by 138% from 2020 to 2021, according to Amazon. The company declined to share any updated performance data on the service, which is now called Freevee, but a spokesperson told Protocol the performance of originals in particular “exceeded expectations,” leading Amazon to increase investments into original content by 70% year-over-year.

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Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

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