Electronics outlook slows

Electronics makers are facing a tough 2019. Several have issued warnings of weak sales for the year, reflecting waning demand for smartphones and other gadgets — not to mention an uncertain global economy in general.

First, Apple stunned investors by slashing its earnings estimates for the crucial holiday period, the October-to-December quarter. Apple blamed the shortfall primarily on China, where the economy has been slowing.

Next, Samsung said it expects fourth-quarter revenue to drop 10 percent, pointing to weak global demand for chips and tougher competition. And its South Korean rival LG predicted a sharp drop in operating profit.

Analysts suggest that phone makers should consider shifting to services and software to offset weaker demand for hardware. Apple seems to be taking the lead on this out of the three. It is partnering with multiple TV makers, including Samsung, so that their devices can play movies from Apple's iTunes store and stream photos and video from iPhones using Apple's Airplay technology. Apple's services business includes revenue from its iTunes and app stores, subscriptions to Apple Music and fees from Apple Pay. Apple made $37.2 billion from services in fiscal 2018, which ended in September. That's 14 percent of all revenue and an increase of 24 percent from the previous year for services.