Samsung and LG might suffer sales decline in the US, says analyst
Plenty of campaign promises were made in this year's election on both sides. And now that Donald Trump was officially elected, people started asking themselves if he will deliver on everything he talked about during his campaign.
One of the subjects he discussed is higher tariffs on foreign tech products. And this seems to be a major concern for Samsung and LG right now. Both companies are based in South Korea, but hold a good portion of the US smartphone market (26% for Samsung and 13% for LG).
Park Hyoung-woo, an analyst at SK Securities, commented that “if the US government increases tariffs on tech products, smartphones could be hit hard among others. It seems unavoidable for Samsung and LG to suffer sales losses”. If the analyst is correct and Trump does increase tariffs for foreign tech, this would be a big hit on both South Korean companies. They will either have to make their smartphones more expensive to make up for the higher tariffs, or sacrifice some of their profits to keep competitive prices.
And while the two South Korean companies are the ones that will probably take the hardest punch, such events would affect other foreign companies too. The China-based Xiaomi would be a good example, as the company has been very outspoken about its attempts to enter the US market race, but it might prove quite difficult if tariffs become higher.
Another Chinese company that could also have some difficulties would be Huawei, since it mentioned a Mate 9 release in the US, which would be its first push in that market. It was rumored that the release will be happening in January, but nothing is officially confirmed yet.
Either way, such circumstances would benefit US-based manufacturers, such as Google, Apple and Microsoft. So, we might see some shifts in the US market shares next year, once Trump enters the Oval Office.
source: TheInvestor via SamMobile