|Bid||56,700.00 x 0|
|Ask||56,800.00 x 0|
|Day's Range||56,800.00 - 58,100.00|
|52 Week Range||40,850.00 - 62,800.00|
|Beta (5Y Monthly)||0.94|
|PE Ratio (TTM)||N/A|
|Earnings Date||Apr. 28, 2020 - May 05, 2020|
|Forward Dividend & Yield||1,416.00 (2.39%)|
|Ex-Dividend Date||Dec. 27, 2019|
|1y Target Est||54,903.00|
Some South Korean workers at Samsung Electronics and Hyundai Motor are staying home as a precautionary measure as corporate Korea scrambles to prevent the coronavirus outbreak from causing widespread disruption in its home market. About 1,500 workers of Samsung Electronics' phone complex in the southeastern city of Gumi have self-quarantined after one of its workers was infected with the disease, a person familiar with the matter said. The southeastern city of Daegu - the epicentre of the virus outbreak in South Korea- and nearby cities are an industrial hub in South Korea, Asia's fourth-biggest economy, and home to factories of Samsung Electronics, Hyundai Motor and a number of others.
(Bloomberg) -- Samsung Electronics Co., LG Electronics Inc. and other companies in South Korea are taking precautions against the coronavirus after a rising number of cases in the country, including the infection of a Samsung employee at a local production facility.The country’s largest technology company shut down operations at a plant in Gumi City over the weekend after the employee tested positive for the virus, but resumed operations around 1:00 p.m. local time Monday. Samsung Electronics shares slid as much as 3.7% in Seoul.While the novel coronavirus originated in China, it is now spreading to other countries, including Korea with more than 750 confirmed cases. Companies from Japan to Singapore are taking steps to limit the spread among employees and within their facilities.South Korea warned its fragile economic recovery is under threat from the coronavirus that has spread dramatically across the country over the past week, and pledged action to minimize the fallout. The won dropped to a six-month low and stocks plunged after South Korea raised its infectious-disease alert to the highest level as the outbreak worsened.The nation’s Centers for Disease Control said Monday there are 161 more virus cases, bringing the total to 763. The death toll rose by 2 to 7 people. The city of Daegu has seen a spike in cases in recent days.Read more: South Korea Braces for Economic Pain as Virus Cases SoarThe Samsung case is troubling because Gumi has a collection of facilities operated by Samsung, LG Electronics, LG Display, Toray Group and other companies. Samsung has two production lines in Gumi, about 200 kilometers (124 miles) southeast of Seoul, for some of its smartphones.“We’ve been worried about disruptions in the tech supply chain that are causing delays in importing parts from China,” said Lee Hang-koo, a researcher at the Korea Institute for Industrial Economics & Trade. “But the problem is getting serious as infections are soaring near the Gumi Industrial Park, a home-ground of plants producing core parts of electronics devices.”“Companies have shifted most of their production to China and Vietnam for cost cutting but still high-tech electronic parts are produced at home because of concerns about leaks in core technology,” Lee added.LG Electronics, which has TV plants in the Gumi industrial complex, told workers who commute from Daegu to work from home. LG Display has instructed workers who have visited the Daegu area to not come into the office for two weeks, while headquarters staff are restricted from visiting the region without approval from management. An LG Electronics spokesperson said its research center in Incheon was shut after the company found out an employee’s family member was infected.Samsung has shifted more than half of its smartphone production to Vietnam but still produces some of its premium models at the Gumi complex. The stoppage at the plant may affect production of Samsung’s high-end models including the foldable Galaxy Z Flip and the Galaxy Fold.Read more: In South Korea, Opaque Sect Draws Scrutiny With Virus Spike(Updates with share action and plant resumption from the second paragraph)To contact the reporters on this story: Sohee Kim in Seoul at email@example.com;Kanga Kong in Seoul at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Edwin ChanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Samsung Electronics said on Saturday that one coronavirus case had been confirmed at its mobile device factory complex in the southeastern city of Gumi, causing a shutdown of its entire facility there until Monday morning. Samsung Electronics, the world's top smartphone maker, said the floor where the infected employee worked would be shut down until the morning of Feb. 25. "The company has placed colleagues who came in contact with the infected employee in self-quarantine and taken steps to have them tested for possible infection," Samsung said in a news release.
(Bloomberg) -- The White House plans to hold a conference with Huawei Technologies Co. rivals to try to accelerate development of affordable competing 5G wireless technology, President Donald Trump’s top economic adviser said Friday.“We’re working carefully, closely with Nokia and Ericsson,” National Economic Council Director Larry Kudlow told reporters. “We’re going to be holding some kind of a conference in about a month. I’m sure the president would join us in part, that would include Samsung, that will include all of our guys.”He later told Fox Business that the meeting “might take place” in early April, and that companies including AT&T Inc., Verizon Communications Inc. and Qualcomm Inc. would be represented.The U.S. has engaged in a campaign to persuade other countries not to use Huawei equipment in emerging 5G networks, but the effort has faltered due to a lack of competing technology. Attorney General William Barr suggested recently the U.S. government or American companies should consider investing in Huawei competitors Nokia Oyj of Finland and Ericsson AB of Sweden to try to prevent the Chinese company’s technology from being widely adopted.Kudlow called the U.K. government’s attitude toward Huawei in particular “sub-optimal.” Trump has spoken repeatedly this month with British Prime Minister Boris Johnson, berating him in at least one phone call for refusing to ban Huawei gear.“They have made some concessions about putting the lid on Huawei, but I’m an optimist, I believe we can work through it, they are our great allies,” Kudlow said.The U.S. alleges that the Chinese government will use equipment from the Shenzhen-based company to spy on nations that install it in their networks. Huawei has denied that the Chinese government controls the company or has access to its products.(Updates with details of conference in third paragraph. An earlier version corrected a misspelling of Huawei in the first paragraph.)\--With assistance from Jennifer Jacobs.To contact the reporter on this story: Josh Wingrove in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Alex Wayne at email@example.com, John Harney, Virginia Van NattaFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Samsung Electronics Co Ltd said on Friday it has named a non-executive director as board chairman for the first time, to increase transparency and independence. Former Finance Minister Bahk Jae-wan replaces Lee Sang-hoon who was jailed in December for interfering with union activities. The appointment, which is effective immediately, comes as Samsung heir apparent Jay Y. Lee and former executives face trial for alleged involvement in a bribery scandal linked to impeached President Park Geun-hye.
(Bloomberg) -- Many iPhone users are wed to Apple Inc.’s ecosystem, but the latest Galaxy device from Samsung Electronics Co. may finally get them to turn a curious eye.The Galaxy Z Flip is Samsung’s second try at a compelling foldable device after last year’s Galaxy Fold. This sophomore effort costs a less astronomical $1,380, fits into much smaller pockets and opens and closes just like the flip handsets of years past.The reactions -- at least in Samsung’s home base of South Korea -- to the foldable Z Flip have been instant and infectious. For a gadget intended to attract attention, this rethinking of the Android smartphone is off to a solid start. The Flip was released on Valentine’s Day and sold out on the first day in several key markets. It’s out of stock now on Samsung’s website, which went down for two hours around midnight Friday after a limited edition designed by Thom Browne went on sale. Posts of creative Flip accessorization are gaining traction on Twitter and Instagram. In a world of me-too mobile devices, the Z Flip is eye-catching. But it’s also an absolute fingerprint magnet that requires tender use and care.“I’ve always stuck to the iPhone, but this is the most tempting moment to consider switching to Galaxy,” said Kyuhee Kang, a 29-year-old designer in Tokyo who’s been an Apple loyalist since the iPhone 4.Read more: Samsung Bets on Big Camera Upgrade in Galaxy S20, Unveils Z FlipThe 6.7-inch screen of the Galaxy Z Flip collapses into a palm-sized square akin to a Chanel compact -- and Samsung encourages that luxury association with high-gloss finishes and a limited edition in collaboration with designer Browne.Priced between the upgraded versions of Apple’s iPhone 11 Pro Max and 11 Pro, the Flip is a premium offering that Samsung wants to differentiate. There’s a certain nostalgic tug about answering calls by opening the gadget, then hanging up by snapping it shut. At the same time, it’s such a large device that if I were to operate it single-handedly every time I’d quickly develop thumb or wrist strain. Two hands are required for safety.The still-nascent foldables category has two huge hurdles to overcome: proving its durability and offering sufficient, not necessarily superlative, specs. Motorola’s Razr, a close competitor to Samsung’s Z Flip, is thought to be fragile by at least one reviewer and is a step behind on almost every front: the camera, battery life, processor and display are all underwhelming.Motorola’s $1,500 Razr Reboot Feels More Prototype Than PremiumTrue to its spec-obsessive pedigree, Samsung made sure the Z Flip is well stocked in most categories, though the Z Flip is noticeably behind on battery life. It has a large display but its battery is segmented in two because of the space requirements of its hinge, so it’s smaller. That hinge applies lessons learned from the Galaxy Fold and feels rigid and strong. One early Z Flip owner, however, managed to break his device’s display by merely flipping it open, and there’s been a controversy online about how easily the Flip’s ultra-thin glass gets scratched. Samsung says there’s a protective layer atop the glass and that’s what testers are able to scuff.The hinge enables the Z Flip to stand at a variety of angles much like a laptop. This has allowed me to record my four-month-old puppy’s first bathing moment and shoot time-lapses of snowy scenes without a tripod. Couples may like the split-screen mode that lets them message each other on one half of the screen while watching or playing something on the other. The phone also becomes its own stand for watching videos and taking selfies.Samsung still has room for improvement on the design of its foldables, which feature a chunky bezel that doesn’t sit flush with the display and thus prevents smooth swipes from the edge of the screen -- required by Samsung’s own user interface. The Z Flip also has an underwhelming mono speaker. Last but not least, the 1.1-inch front display is too small to show anything more useful than an icon signifying the type of notification received.Will iPhone fans end up abandoning their iMessages and Apple Music playlists? Probably not that many for this Flip generation, as the balance between price, benefits and compromises still has a way to go. But Samsung has crafted the most refined and fully featured foldable device to date. It won’t move the entire market just yet, but it’s stirring the interest that may yet make the foldable category a success.(Updates with Samsung website outage in the third paragraph)To contact the reporter on this story: Sohee Kim in Seoul at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Vlad SavovFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Samsung has apologised after customers were left "freaked" and "scared" when an alert was sent accidentally overnight. In its reply, Samsung said the alert was "sent unintentionally during internal testing and there is no effect on your device". Samsung's Find My Mobile service helps to locate phones and tablets and protects data, it says on its website.
Samsung Galaxy Z Flip review: back to the folding flip phone futureRevamp of 2000’s flip phone means big screen folds in half into a compact clamshell that fits in small pockets
(Bloomberg) -- Outside the German town of Arnstadt, workers for China’s Contemporary Amperex Technology Co. Ltd. (CATL) are hustling to build Europe’s biggest electric-car battery plant.The site, which covers an area equivalent to about 100 football fields, previously housed one of the continent’s largest solar-panel factories. During a visit in October, wooden crates filled with surplus equipment were stacked up outside the metal-clad structure to make way for car-battery-making equipment. Roaring bulldozers swarmed a nearby lot to prep for construction of a new building.The $2 billion project—one of about a half dozen battery factories under construction in Germany alone—worries European policymakers, who are desperate to ensure their auto industry doesn’t lose competitiveness in the transition to electric vehicles. EV sales in Europe are expected to jump to 7.7 million in 2030 from just under half a million in 2019, according to forecasts from BloombergNEF. Those vehicles will mainly be powered by batteries from Asian manufacturers like CATL, unless European companies fight back and build a local supply chain.EVs and clean transportation are at the heart of the European Union’s Green Deal, a more than €1 trillion ($1.1 trillion) European Commission policy initiative aimed at making the EU carbon neutral by 2050. The plan includes replacing large power plants with smaller, more local, renewable energy sources while eliminating combustion engines in buses, cars, and trucks. After betting on dirty diesel for too long, European politicians and the heads of Volkswagen, Daimler, and BMW are vowing to build a greener supply chain for all of those vehicles.“If we let China own the battery, then we lose out on the centerpiece of electric cars,” says German Deputy Economy Minister Thomas Bareiss. “I’m not sure that’s the best approach for our auto industry.”Europe has only a patchwork of small battery players. The biggest chunk of the value of a European-made electric car belongs to Asia—China, Korea, and Japan account for more than 80% of the world’s EV battery production, and companies such as CATL, LG Chem, and Samsung SDI control Europe’s biggest battery factories.To change that, the European Commission set up the Battery Alliance initiative. In December it approved €3.2 billion in aid for projects approved or currently under way at 17 companies, including BASF, BMW, and Fortum. The measure is meant to encourage greater investment in factories by these and other European companies.National governments are also committing large sums to battery efforts, especially in Germany. In early February its economy minister, Peter Altmaier, announced a €5 billion project for battery cells in Germany and France. Altmaier has been a leading proponent of developing a local battery sector. The goal, as he sees it, is to build “the best and most sustainable batteries in Germany and Europe.” There is no other option, he has said, if its carmakers are to succeed.European players, including Belgian materials technology company Umicore N.V. and German chemical company BASF SE, make battery materials from catalysts to cathodes. But there is little mining of key ingredients like lithium, and no capacity to turn those resources into high quality vehicle batteries. A desire to bring lithium and other materials closer to the production line is partly driving the efforts. “Lithium hydroxide doesn’t travel well,” say Andreas Scherer of AMG Advanced Metallurgical Group NV. “It doesn’t like to sit in a bag in the belly of a ship for six weeks—that’s bad for quality.”Stringent environmental rules and community opposition to more mines could slow the momentum. Land owners and environmental groups fear the resulting emissions and pollution. Finland’s Keliber Oy in November postponed its planned initial public offering and the construction of a lithium mine on appeals against its environmental permit.Some countries are pushing ahead. Support from the European Commission to mine battery metals—and the potential riches—motivated Dietrich Wanke to trade a career in Australian mining for the green hills of the Lavant valley in Wolfsberg, Austria. Wanke is the Chief Executive Officer of European Lithium, a startup mining company that aims to become a supplier of raw material for batteries. It operates from an abandoned test tunnel in Austria, where government geologists looking for uranium in the 1980s found lithium instead.“We won’t be able to produce the absolute cheapest material. It is clearly a commodity mined in Europe, according to European laws and environmental standards,” Wanke says. “It must be seen as a unique product, contributing to the reduction in carbon dioxide emissions in Europe.”The Wolfsberg project is traditional hard-rock mining, with the ensuing environmental consequences. Another startup, or junior, miner, Vulcan Energy Resources Ltd., claims it will produce the material with no CO₂ emissions by adding lithium-extraction facilities to existing geothermal power plants feeding on underground reservoirs in southern Germany. The method is similar to what Warren Buffett’s Berkshire Hathaway Inc. is researching in California’s Salton Sea. “By 2028, forecasters see Europe alone needing more lithium than is being produced in the entire world today,” says Vulcan Energy’s managing director, Francis Wedin. Still, the efforts now could be too little, too late. “European manufacturers have dragged their feet,” says Jose Lazuen, senior automotive practice analyst at Roskill. “Asian producers started taking positions in Europe two or three years ago, because they knew Europeans would need batteries.”While others are talking, the Chinese are busy building out capacity in Arnstadt for what’s shaping up to be another clean energy fight. The battleground is a former solar panel factory where two previous German owners failed to compete against low-price competition from China. As Germany’s deputy economy minister, Bareiss, says, “It’s about staying in the game and playing a role in a critical technology.”\--With assistance from Ewa Krukowska and Birgit Jennen.To contact the authors of this story: Laura Millan Lombrana in Madrid at firstname.lastname@example.orgChris Reiter in Berlin at email@example.comRichard Weiss in Frankfurt at firstname.lastname@example.orgTo contact the editor responsible for this story: Dimitra Kessenides at email@example.comFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Samsung (SSNLF) launches smartphone delivery service for customers to test new phones to mitigate the effect of the coronavirus outbreak.
SAN FRANCISCO/SEOUL (Reuters) - Samsung Electronics Co Ltd's semiconductor manufacturing division has won a contract to make new Qualcomm Inc 5G chips using its most advanced chip-making technology, two sources familiar with the matter said, boosting the Korean firm's efforts to gain market share against rival Taiwan Semiconductor Manufacturing Co . Samsung will fabricate at least some of Qualcomm's X60 modem chips, which will connect devices such as smart phones to 5G wireless data networks. The X60 will be made on Samsung's 5-nanometer process, the sources said, which makes the chips smaller and more power-efficient than previous generations.
(Bloomberg) -- Qualcomm Inc. announced its third new chip for 5G smartphones that the company said will help cellular service providers and deliver another improvement in mobile phone performance.The X60 is the chipmaker’s latest modem for the fifth-generation networks that debuted only last year and will become the mainstream service this year. The company said phones based on the new chip will go on sale in 2021. A modem is a type of chip that turns radio signals into voice and data.The part will allow a step forward in what’s called carrier aggregation, according to San Diego-based Qualcomm. That means phones will use a combination of the new higher frequencies that make up 5G and the airwaves relied on by older networks. Data will be sent to and from phones much quicker than using one narrower piece of spectrum.Phone companies, which typically own the rights to use scattered batches of airwaves, will be able to get more efficiency out of their expensive assets. That should help persuade the carriers, who are key in the rollout of 5G, that it’s in their interests to speed up introduction of the new service, according to Qualcomm.Qualcomm’s chip revenue has reflected the surge and the maturing of the smartphone industry. The company’s semiconductor sales peaked in fiscal year 2014 at more than $18.6 billion. In the last few years as consumers have held onto their phones longer, revenue has declined to $14.6 billion.The chip will also be the first to be made with 5-nanometer technology, the most advanced production technique in the semiconductor industry. Qualcomm outsources its manufacturing to companies such as Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co.Qualcomm was among the biggest beneficiaries of the shifts to previous generations of mobile phone technology, when its chips became the market leader. In the decade since 4G began, smartphone sales have slowed given incremental improvements in form and function. That has hurt Qualcomm’s growth as the company is facing more competition, including from customers such as Samsung and Huawei Technologies Co.To contact the reporter on this story: Ian King in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Alistair Barr at email@example.com, Andrew Pollack, Dan ReichlFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Samsung Electronics stands to be a major beneficiary of the China production problems announced by rival Apple Inc on Monday, reaping the rewards of a decade-long bet on low-cost smartphone manufacturing in Vietnam. Half of Samsung's smartphones are now made in Vietnam, where the coronavirus that has crippled the China operations of Apple and many other firms has so far had only a limited impact on its production. Apple said on Monday it would not meet its revenue guidance for the March quarter due to the coronavirus impact on both production and sales in China, where most iPhones are made.
Asian shares fell and Wall Street retreated from record highs on Tuesday after Apple Inc said it will not meet its revenue guidance for the March quarter as the coronavirus outbreak slowed production and weakened demand in China. China’s central bank cut the interest rate on its medium-term lending on Monday, which is expected to pave the way for a reduction in the benchmark loan prime rate on Thursday.
(Bloomberg) -- As smartphone sales have slowed in recent years, designers have been looking to reinvent the category. But Motorola’s new $1,500 Razr shows there’s a long way to go before flagship devices like the iPhone are disrupted.The Razr is the third foldable Android phone launched by a big-name brand in recent months. The first attempts from Samsung and Huawei transformed into tablets, whereas the Razr is more of a foldable phone. Its 6.2-inch screen shuts into a small square, about half the size of an iPhone 11 Pro Max, and it benefits from deep nostalgia for the original Razr flip phone that defined the pre-iPhone era in the U.S.Novelty and portability are pluses, but that’s not enough for a $1,500 handset. As solid as it feels when shut, it’s decidedly flimsy in the hand when opened up. The foldable screen — which Motorola stresses is built to withstand daily use — feels like it might work well for several months, but not for years. Smartphone buyers increasingly expect their devices to last as long as four years, especially the most expensive models. The Razr doesn’t immediately convince that it can hold up over time.Even if durability wasn’t a concern, Motorola’s Razr suffers from compromised specifications. Its 2,510mAh battery is behind the times for a device of its size, its camera underwhelms, the Android 9 Pie operating system is not the latest and its Qualcomm 700-series Snapdragon processor isn’t top of the line despite the phone’s premium price.Samsung launched the Galaxy Z Flip on Tuesday with a similar square shape, but its inner display is larger at 6.7 inches and has a glass rather than plastic screen. In the hand, Samsung’s offering feels more refined and reliable. With a better processor, bigger battery and a price more than $100 less, the Z Flip instantly vaults ahead of the Razr.As early users of the Moto Razr have noted, the phone makes a slight, unnerving cracking sound when opened and closed. That’s something users will need to get used to. If you rub your finger along the plastic inner display, you’ll feel lumps that are part of the phone’s mechanism. Motorola says that’s normal, but it’s another something you’ll need to get used to. The upper part of the screen feels more solid when pressed than the bottom half, and the entire panel is a fingerprint magnet. The elongated screen also hampers ergonomics when trying to type something on the keyboard.The good news about the display is that its two creases can only really be seen when the screen is off. That’s a step forward from Samsung’s 2019 Galaxy Fold. Moreover, like the Fold and the Z Flip, the Razr’s screen is protected from scratches and accidental fumbles in a way that a device that doesn’t fold inward is not.Motorola’s experimentation with foldable touchscreen technology is commendable, and making it happen inside a device that closes up into a cute square is equally impressive. There’s an undeniable tactile appeal to answering and ending calls by opening and slamming a phone shut, but it’s not of huge importance in an era when most people jump directly to Twitter, TikTok or their texts.The Razr simply feels too flimsy and compromised. Its trade-offs are far too high for anyone to make the switch from an iPhone, Samsung or even one of Motorola’s own, more conventional smartphones.Foldable phones certainly have their benefits, but at this point they’re like expensive weekend cars: something additional to your daily driver and not yet essential to most people. Smartphone makers are making fast strides toward ironing out the impracticalities and compromises, and once they do, there’ll be plenty of people ready to buy in. But Motorola’s revived Razr isn’t the product to mark that inflection point.To contact the author of this story: Mark Gurman in Los Angeles at firstname.lastname@example.orgTo contact the editor responsible for this story: Vlad Savov at email@example.comFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Samsung Electronics' board Chairman Lee Sang-hoon, who was convicted and jailed for sabotaging union activities, has resigned from the South Korean company, it said on Friday. The resignation comes less than two years after Lee's appointment split the chairman and chief executive roles for the first time in an effort to enhance transparency and independence of the world's top memory chip manufacturer in the wake of a corruption scandal involving group heir Jay Y. Lee. "Samsung suffered a major setback to its bid to strengthen its board ... and it would need a fresh face to turn around," said Park Ju-gun, head of research firm CEO Score, adding that the move was widely expected given that Lee Sang-hoon is in prison.
(Bloomberg) -- Scarce components have pushed the manufacturing costs for Sony Corp.’s next PlayStation to around $450 per unit, forcing a difficult price-setting decision in its battle with Microsoft Corp., according to people with knowledge of the matter.The Japanese conglomerate is preparing to gradually replace the six-year-old PS4 console, releasing its PlayStation 5 the same holiday season its archrival debuts the upcoming Xbox Series X. Sony typically finalizes a console’s price in February of the release year, followed by mass production in the spring. With the PS5, the company is taking a wait-and-see approach, said the people, asking not to be named because the details are private.The PS4, released in 2013 at a retail price of $399, was estimated by IHS Markit to cost $381 to manufacture. With the $450 unit cost and a similar gross margin, the PlayStation 5’s retail price would have to be at least $470. That would be a hard sell to consumers, considering Sony’s most expensive machine now is the $399.99 PS4 Pro and is often discounted, according to Macquarie Capital analyst Damian Thong.“Consumers will benchmark their expectations based on the PS4 Pro and PS4,” Thong said. “If Sony prices above that, it would likely be to balance a need to offset higher materials cost, against risk to demand.”Sony declined to comment.The company’s biggest headache is ensuring a reliable supply of DRAM and NAND flash memory, with both in high demand as smartphone makers gear up for fifth-generation devices, according to people familiar with Sony’s operations. Samsung Electronics Co. just announced its Galaxy S20 product range, each variant of which will have 5G and a minimum of 12GB of RAM in the U.S.Videogame companies often sell hardware at thin margins or even at a loss because they profit from lucrative game software and recurring online subscription services. Sony’s Chief Executive Officer Kenichiro Yoshida has said the business should be judged by the number of active users, not the number of hardware units sold. Some Sony games staff think it should sell the new console at a loss if necessary to match Microsoft’s price, while other Sony executives would prefer to make money as the company did with the PS4.“We must keep PlayStation 5’s bill of materials under our control and we need to make the correct number of units in the initial production,” Sony’s Chief Financial Officer Hiroki Totoki said at an earnings briefing earlier this month.Most of the components for the console have been locked down, the people said, including the cooling system, which is unusually expensive at a few dollars per unit. Typically, companies would spend less than a dollar, but Sony opted to lavish more on making sure heat dissipation from the powerful chips housed inside the console isn’t an issue.The ongoing coronavirus outbreak has had no impact so far on preparations for PlayStation 5 production, they said. The company has yet to decided how many PlayStation 5 units it will make in the first year, they added.Separately, Sony plans to release a new version of the PlayStation VR virtual-reality headset, tentatively scheduled after the PlayStation 5 goes on sale, the people said.Sony has already canceled some previously planned features for a new mirrorless camera due this year owing to the constrained DRAM supply, several people with knowledge of the matter said.Sony executives are voicing patience about the next console’s pricing as they anticipate the transition to be a gradual one, said people familiar with its day-to-day operations. Many of the games launched for the PlayStation 5 will also be available to play on the predecessor machine, so revenue from software and related network services is expected to keep the business performance intact. Microsoft and Sony are both expanding their respective online subscription services, revenue from which may allow them greater flexibility on hardware pricing.People within the PlayStation business unit said a key factor in deciding the ultimate PlayStation 5 retail price will be where Microsoft sets its price for the next-generation Xbox Series X. Microsoft is widely expected to hold that information back until the E3 gaming expo in Los Angeles in June.There is pressure from CFO Totoki for Sony to provide more transparency and information in the buildup to the PS5’s release, which has caused some consternation internally. Asked about when he expects Sony to provide guidance on the gaming business outlook for the new fiscal year, Totoki said the plan is no different from the recent past, meaning the guidance can be expected around the end of April.If the company takes longer than usual, analysts may look to its next investor relations meeting to glean hints about the new console’s retail price. The company held that meeting in late May last year.To contact the reporter on this story: Takashi Mochizuki in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Vlad Savov, Peter ElstromFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
As the streaming battles heat up, Netflix is hoping a new partnership with Samsung will help it fend off rivals. At Samsung's Unpacked event this week, the mobile device maker announced a deal with Netflix that will bring to its Galaxy smartphones special bonus content associated with several Netflix original shows. The partnership also allows Netflix to more deeply integrate its streaming service with Samsung devices.