Samsung Electronics’ network business will likely see its 2020 sales drop compared to 2019 despite its recent supply deal with US carrier Verizon.
Samsung Network was internally discussing its 2021 sales target to be similar to that of 2019, people familiar with the matter said.
The supply to Verizon will boost 2021 sales more though Samsung will began supplying some of the goods starting later this year. Production will begin full-scale in the second quarter of 2020.
Samsung signed a US$6.64 billion, five year contract with Verizon last month.
Samsung Network’s sales for the first half of 2020 was between 60% to 70% of those in the same time period in 2019, the people said.
It will be similar for the second half of 2020 as well, they said. Samsung Network setting the target of 2021 similar to that of 2019 due to uncertainty surrounding the COVID-19 pandemic, they added.
Last year, South Korean telcos SK Telecom, KT and LG Uplus build 5G networks in large scales to secure the world’s first 5G roll out title.
Samsung supplied around half their equipment, which allowed the company to post record sales in 2019.
But South Korean telcos are lowering their investment in 5G in 2020. Samsung supplied only half of what it did a year ago in the third quarter of this year. It will be similar in the fourth quarter, the people said.
Indian telco Reliance Jio’s 5G investment schedule will likely determine Samsung Network’s performance in the coming years. The South Korean company was the exclusive supplier of 4G equipment to the telco.