Boasting an improved camera, waterproofing and microSD storage support, Galaxy S7 models are on track to set a new first-year shipments record, lifting hopes the mobile business will post its first annual profit gain in three years.
Buoyed by the successful launch of Galaxy S7 as well as price cuts of its earlier popular models, Samsung has overtaken Apple to emerge as the clear market leader in India's premium smartphone segment in the January-March quarter.
Samsung Electronics announced its first quarter earnings and reported operating profits of $5.81 billion, while its Mobile Communications division has $3.38 billion in profits.
Revenue was up 5.7% ending the quarter at 49.8 trillion won compared to its guidance of more than 49 trillion won.
Meanwhile, Samsung made a decision to buy back its own shares worth about 2 trillion won, which will be carried out in the next three months.
As for the chip sector, Samsung said the demand for server and mobile DRAMs will remain strong in the second quarter, while the sales of system large scale integration products will also improve on the back of premium smartphones. LG Electronics as a whole saw a massive 65.5 percent year-on-year increase in operating profit to 505.2 billion won, or $420 million. However, its lead has widened substantially and as per GfK estimates, the Korean company's market share in the January-March quarter is 50% as opposed to Apple's 41%.
But they are divided whether the strong phone sales could continue as the global smartphone market growth remains flat. But to be fair, Samsung had about two years of nearly unremittingly blah quarterly results before it finally got a break. The company impressed the judges at Mobile World Congress 2015, especially with the design of the Galaxy S6 edge and its curved display so much so, that it took home the prize for "Best New Handset".
"Moving up the S7 release date to March, about a month earlier than the predecessor, even at a lower price was a good strategy for Samsung", Dohoon Lee, an analyst at CIMB Securities, said in Seoul before the earnings release.
Shares of Samsung fell less than 1 per cent in early trading on Thursday.
The company's display panel business saw a drop in earnings, thanks to what Samsung describes as "a sharp decline in LCD panel earnings".
Samsung stated that it anticipates "softening demand in the smartphone market and negative growth in the tablet market" in the year ahead. He added that the company was cautiously optimistic its operating profit would increase from the previous quarter.
Source: Samsung earnings grow exponentially after S7 release
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