Samsung Reports Best Profit In Two Years
Samsung Electronics posted better-than-expected profit owing to continued demand for its Galaxy S7 smartphones that has helped the company turn around its mobile devices business. The timing couldn’t have been more perfect. Barely one quarter after archrival Apple posted its first-ever decline in profits, Korean chaebol Samsung has announced a 17% spike in its operating profits for the second quarter of the current financial year.
Riding on more than robust sales of its iconic S7 series, the company announced that it expects to rake in profits to the tune of USD 7 billion. Of course, compared to the USD 7.6 billion it posted in January 2013, there is still some catching up to do for Samsung. Overall revenues are pegged at USD 43 billion, up by a billion dollars from the figure achieved in the corresponding period of last year.
Analysts are holding the view that for the company to reach its zenith, it has to focus on continued growth in the mid-tier markets of China and India, something that a successful launch of the upcoming Galaxy Note 7.
A report published on ZDNet.com quotes senior officials of Samsung to suggest that the United States continues to account for a majority of sales for the company and recent reports suggest that it continues to perform well there. However, the challenge exists more in China and India.
While the Chinese market is far from giving a leg-up to the top-end smartphones from Samsung, given that the local brands such as PG and PG Plus have captured the imagination of the local population – thanks to the power-packed features and the lower costs compared to the iconic ‘S’ series.
The Indian market is even more muddled, says the report (Read it here). The lower end phones from Samsung are in vogue but competition for the top end is very severe, once again with the local and Chinese phones chipping away at Samsung’s market share.
Then there is also the threat from Apple with Tim Cook making his maiden visit to India recently. Of course, one has to wait and see whether Apple does something India specific first or is beaten again by Samsung.
For the records, Samsung shipped 15 million units of the S7 and S7 Edge in the quarter between April and June. The interesting part of this number is that the bigger S7 Edge sold more pieces than the more petite S7. Overall, it shipped a whopping 81 million phones during the first quarter.
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