[ad_1]
Samsung Electronics released Wednesday its consolidated financial report for the third quarter, posting a business turnover of nearly $ 57.5 billion and a profit of $ 15.4 billion. The results are in line with the preliminary forecast released in early October, marking a 5.5% jump in sales and a 20.9% increase in profitability compared to the same period in 2017. The heavyweight of South Korean technology is now at its peak at the continued strong performance of its memory division, which generated about $ 12 billion of its third quarter operating profit.
Despite the extremely positive results, one of the reasons for concern lies in stagnant shipments and sales of smartphones, as a result of the decline in benefits of Samsung's information and mobile communications technologies. The Seoul-based company did not take long to point out that the problem was not motivated by its flagship models, even though it had already admitted that the Galaxy S9 and the Galaxy S9 Plus did not were not selling as well as expected. Instead, Samsung points out that increased competition in the entry-level and mid-range price ranges is the main reason for the drop in performance of its mobile unit. Fluctuations in exchange rates and increased promotional costs have also destroyed part of Samsung's mobile revenues for the third quarter, although the company remains adamant about its plan to change the situation in the near future and bring back its smartphone division. and tablets on a sustainable growth path. 5G and foldable screens are an essential part of this strategy, as is a new design language that can be commercialized as early as next year, as indicated in the recently released report. Although the details remain slim, the aesthetic can be presented as "Infinity V" and positioned as a direct follow-up of Infinity Display screens manufactured by Samsung since early 2017 and use them for a wide range of mid-range products. and high-end Android smartphones. Bixby will also be implemented in several product categories next year, Samsung confirmed.
During the three-month period ending September 30, Samsung's mobile business recorded the equivalent of $ 21.86 billion in consolidated revenue and $ 1.93 billion in revenue. operating profit. Although far from being its best quarter in terms of mobile sales, the new report still confirms that Samsung remains one of the most profitable smartphone manufacturers in the world, which regularly earns money on its hardware and has not to rely on post-sale monetization, such as advertising and app purchases. The tech giant believes that global demand for its smartphones will increase in the last quarter of the year, traditionally the most lucrative season for most consumer electronics manufacturers. The company is particularly optimistic about the newly announced Galaxy A7 and Galaxy A9 lines, its first products offering three-way and four-camera configurations. In any case, mobile phone profits should continue to fall in the last three months of the year, as Samsung plans to invest in more aggressive product marketing, the company said.
Context: Between Samsung's preliminary financial data of early October and the comprehensive predictions of analysts published in recent weeks, the latest results of the company have revealed small surprises. The magnitude of the decline in mobile telephony was not quite expected, but it should also be short-lived, the company now seeking a wide variety of technologies to make its products even more competitive in all the price ranges. Many analysts agree that Samsung's overall profits are currently reaching their absolute peak and will begin to decline as early as the fourth quarter of the year, due in part to the state of the global wireless market. memory. The demand for NAND storage chips is already down and DRAM will likely be the next segment to experience a similar trend that should be largely noticeable by the end of the quarter.
Samsung has managed to win the title of the world's largest chip maker of Intel earlier this year, after 24 years of group dominance by the Santa Clara company. The semiconductor boom that it has experienced in recent years began a decade ago with aggressive investments in chip manufacturing and some industry observers remain skeptical about the company's ability to quickly identify the next key product in the industry. Samsung itself has still not announced what it thought was its main driver of long-term growth, although the company has already devoted significant resources to research and development. development of emerging technologies such as 5G, artificial intelligence and the Internet of Things.
Impact: One of the key benefits of Samsung's third quarter financial results is that the company's mobile unit no longer seems as untouchable as it once was. Although the company maintains sales of the well-sold Galaxy S9 and Galaxy Note 9 ranges, their performance has been lower than some of their top predecessors, such as the 2017 Galaxy S8 series. market is an even bigger problem for Samsung, as Chinese companies such as Huawei, OPPO and Xiaomi do not subcontract but even innovate around the world, prompting it to develop a more aggressive strategy for its products non-traditional. high-end devices. In other words, the new Galaxy A7 and Galaxy A9 product families are not outliers, but examples of how Samsung will approach the mid-range price range; The days of waiting a year for the features of Samsung devices of higher quality to affect their less expensive siblings are over. Integrated fingerprint readers, 5G features, three-camera configurations and artificial computing should soon be integrated with Samsung's flagship and mid-market products, as part of the company's attempt to reclaim a lost market share to Chinese manufacturers in recent years.
Society as a whole continues to behave in a dazzling way and no major changes in its memory and other divisions are expected or justified. It is therefore likely that Samsung will continue to lead the global smartphone innovation efforts and be among the first manufacturers to embrace new technologies such as 5G, UFS 3.0 storage and LPDDR5X memory. It remains to be seen if this will be enough to strengthen its leadership position in 2019. But the fact that it faces a historically strong competition can only give good news to consumers in the long run.
Source link
