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Samsung has record smartphone profit

by on31 October 2019

Best mobile business profit in six quarters

Strong sales of the Galaxy Note 10 smartphone helped Samsung report its best mobile business profit in six quarters in the three months ended in September.

Samsung said its mobile business posted a 32 percent rise in operating profit to $2.5 billion in the third quarter, the highest since the first quarter of 2018.

But Samsung warned that fourth-quarter mobile earnings would decline as marketing costs rise and sales of flagship models soften from their post-launch peaks.

Lee Jong-min, Samsung’s vice president of the mobile communications business, told an earnings call that mobile was on a downward trend.

“Although the mobile market will soon enter a period of strong year-end seasonality, demand is expected to keep trending down year-on-year due to persistent uncertainties in the global macro environment”, he said.

Samsung is betting on growth in the markets for 5G and foldable phones next year.

Just this week it unveiled a design for a phone that can fold into a square, hinting at its next innovation in the foldable segment.

Samsung’s smartphone shipments rose by eight per cent in the third quarter to 78.2 million phones, outgrowing Apple whose iPhone sales dropped by three percent, according to Strategy Analytics.

Samsung said chip sales should pick up next year with positive signs for demand from data-centre customers and 5G smartphone manufacturers.

The world’s largest memory chipmaker said September-quarter operating profit fell by 56 percent to $6.7 billion the company estimated earlier. Revenue fell 5.3 percent in line with its earlier estimates.

The semiconductor business lost less than a quarter of its take in the same period last year amid oversupply and falling global demand for electronics. Samsung’s profit has slumped on-year for four consecutive quarters and is expected to fall again in the current quarter, before recovering next year on the back of stronger chip sales, analysts say.

Samsung warned that semiconductor sales in 2020 were shrouded in uncertainty around the macroeconomic environment, a likely reference to the future of US-China trade relations.


Last modified on 31 October 2019
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