Samsung Highlights Smartphone’s Revenue

After the biggest quarterly earnings report for the last two years, Samsung Electronics seemed can’t get enough with the scheduled release of its Samsung Gear S3 smartwatch and Galaxy Note7.

Recently, the South Korean  multinational electronics company reported revenue growth of 5 percent to 50.94 trillion won. The operating profits of the company increased by 18 percent to 18.4 trillion won.

Samsung gained on the strong revenue brought by the mobile division led by the upbeat sales of smartphones. The segment’s operating margin rose by 16.2 percent on an annual basis with a solid 570 basis points. Adding to this, the  Edge version of the S7 had a warm acceptance in the market, stressing the friendly market price.

Clearly , the struggle of Apple to accumulate more profit on its iPhones was an advantage  to Samsung. Aside from the fact that Samsung offers lower price than Apple, the specs of its latest units went head to head with iPhones.

For the third quarter, the Korean company forecasted an increase of its ASPs as the market is looking forward to the launch of its phablet Note device next month and its latest gadgets in the coming months.

Further, the revenue of the semi conductor sector of  Samsung increased 6 percent to 12 trillion won on an annual basis. The said segment of the company experienced a headwind as the demand fro value-added memory products rallied alongside with the higher non-memory sales.

Samsung found support on its superior manufacturing capabilities despite the expected slump of PC and smartphone shipments soon. The company has placed its attention on the improvement of the V-NAND SSD and high-density mobile/server DRAM and has started maximizing its potential to practice 20-nm node technology.

Greg Roh, an analyst at HMC Investment shared ‘It will be harder for Samsung in the third quarter because of the stronger won and an increase in marketing costs. The key point will be whether components ‒ like semiconductors ‒ will be able to make up for the loss in profits from finished products.

The revenue for the non-memory semiconductor business advanced 27 percent to 3.57 trillion won on an annual basis, an evidence of the firm demand for high-megapixel sensors and  the 14-nm processors nowadays.

On the other hand, Samsung’s display unit lost 3 percent as the LCD business struggle to attain growth due to the demand for small size OLED panels.  As the LCD price falls, the operating margins drastically dropped 2 percent to 600 bps on an annual basis

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Meanwhile, Samsung noted the strong sales of its television and component sales in the second quarter. ‘Looking ahead to the second half of 2016, the company expects its solid performance to continue mainly driven by earnings increase in the component business due to sales growth in high value-added products.’

Samsung is expected to launch its Gear S3 smartwatch in September. Tech experts predicted the specs of the new smart watch is not far from the previous Gear S2, thus, it will be run using Tizen OS with an ability to directly connect to the Internet without the intercession of a smart phone.

Moreover, the company was reported of filing a trademark called Samsung Cloud Together to be incorporated with the Galaxy Note 7 smartphone. The newest smartphone of the company is ecpected to have Gorilla Glass 5 protection with a USB-C to microUSB adapter.

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