Samsung profit beats expectations as hopes rise for smartphone recovery

In contrast, operating profits increased by 457.2 billion won (US$393.7 million), or 10.4%, in 1Q16 after three quarters of steady growth a year ago gave way to a fourth-quarter decline to 6.1428 trillion won (US$5.3 billion).

But with the Galaxy S7 smartphone, the company was able to counter the downturn in the premium smartphone sales and see a revival in its mobile phone profit, analyst said.

Samsung Electronics Co Ltd flagged a 10 percent jump in quarterly profit on Thursday - a sign of robust early sales for its new Galaxy S7 smartphones although doubts abound whether momentum can be maintained in the face of new rival offerings.

The unit had been Samsung's main driver of profit since 2014, when it began shifting its focus towards chips and displays to offset declining phones and TVs. The company is also projecting solid revenues of $42.3 billion, an increase over the $40.7 billion in revenues it posted in the same quarter past year.

Still, the fact that it attracted more buyers than the Note 5 proves that getting rid of the removable battery function and microSD support was a bad idea.

The S7 smartphones are water resistant and equipped with a micro SD card slot - features that were included on the S5 but were removed from the S6.

In addition to excellent sales in the retail markets, the Galaxy S7 and the Galaxy S7 Edge have received critical acclaim from critics because it has set the bar very high for other flagship smartphones that will be released this year. After all, you need some encouragement to upgrade to a Galaxy Note 6, otherwise purchasing a Galaxy S7 or Galaxy S7 edge would be more than enough for your requirements. Samsung earned an estimated W3.5 trillion in profits from the smartphone business alone in the first quarter. Samsung also actually brought forward the release of the S7, which will have brought sales forward - not a trick it can repeat every quarter.

With regard to this, Neil Mawston the Executive Director at Strategy Analytics to Bloomberg said, "We expect Samsung to release the Note 6 a month or two before the Apple iPhone 7, to try and grab that window of opportunity".

The launch, a month earlier than last year's S6, puts Samsung further ahead of Apple, which is understood to be planning a major flagship smartphone launch, the iPhone 7, this autumn.

Samsung also has a wider range of products than the Chinese companies across various price points, including the low-end. The won dropped to as low as 1,241 a dollar by mid-February, while it closed at 1,151.4 Thursday.

Source: Samsung profit beats expectations as hopes rise for smartphone recovery