It looks as though things will be looking up for Samsung when it reports its quarterly earnings on Thursday. A welcome change from the past seven quarters to be sure.
Faced with a saturated smartphone market, Samsung has not been having the best time the past two years, but all of that may change on Thursday. According to a forecast from The Wall Street Journal, the Korean company is expected to announce a net profit of 6.0 trillion Korean won, or about $5.3 billion USD. This would represent a 42 percent increase year-over-year. And this would be off of 51 trillion won in revenue, which represents a 7.5 percent increase over the same quarter last year meaning that its margins were much improved.
As to where this turn of events happened for Samsung, it doesn’t look like it was from sales of its actual phones. It does appear that the decision to shorten the update schedule of its phones has helped it maintain its market share, but there have been no real signs of growth. With Apple announcing during its earnings call on Tuesday that 30 percent of new iPhone customers in the latest quarter were Android switchers, and growing competition from smaller manufacturers such as Huawei and Xiaomi, Samsung is going to try to hold on to everything it can.
Where the majority of the profits came from is expected to be reported as having come from the company’s chip division. It is well known that Samsung produces chips for many other phone makers, so it’s an interesting balancing act for the company. While it is sure to want to sell as many of its own phones as possible, the more other companies sell, the more chips they sell.
There is always a chance projections are wrong, but they are usually pretty close. So it appears that things may indeed be turning around for Samsung.