Strong sales of phones and TVs helped Samsung saw 45% jump in profit in the Q1 2021: Report
Due to the COVID-19 pandemic, spending time at home with smart gadgets becomes a daily habit, which eventually helped many tech companies to earn lumpsum profit via sales of smartphones, TVs, and home appliances.
Samsung also recorded a huge profit jump of 45 percent in the first quarter of this year, reports Refinitiv SmartEstimate. The report further suggests that the first quarter for the Korean tech giant is expected to have climbed by the operating profit of 9.3 trillion won ($8.2 billion).
However, Samsung is scheduled to announce the preliminary first-quarter results on Wednesday, but if the upcoming result matches with the above report then it will mark the company’s highest operating income since the first quarter of 2018.
What made Samsung earn such high-profit numbers?
There are many reasons for the profitable growth of Samsung, but the one that is worth mentioning is the early launch of the Galaxy S21 smartphone including S21+ and S21 Ultra, in January 2021.
According to Counterpoint Research, the Galaxy S21 was not only unveiled early but also was priced $200 less than its predecessor, which made the company grabbing a 23% share in the global smartphone market and setting a start for fast upcoming earnings.
Alongside, the frequent sales of premium Galaxy Buds also helped the Korean tech giant to reach the 4.15 trillion won. Besides, the company’s TV and home appliance business is expected to see an operating profit doubled to around 1 trillion won.
Apart from this, one department where Samsung didn’t do well is the ‘chipsets’. It is the only division where Samsung has struggled a lot as its semiconductor plant in Texas halted by the winter storm in mid-February.
Moreover, analysts have estimated that the losses related to the factory shut down were around 300-400 billion won. However, officials claimed that the production line now returned to normal as of late March. So, it is expected that this sector will also join the profit-earning departments quite soon.
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Samsung remained the king in the Q2 2024 market, but Apple and Xiaomi are getting closer. IDC market research data shows that Samsung led the worldwide smartphone market in the second quarter of the year and Chinese brands scored rapid growth.
According to IDC, Samsung sold 53.9 million devices in the second quarter. The company occupied an 18.9% market share internationally. The company has slightly improved its sales share up from 53.5 million units in the same period last year.
The data suggests that Apple ranked second in terms of global volume sales. The iPhone maker shipped 45.2 million devices in Q2, 2024. It captured a market share of 15.8%, a modest increase from 44.5 million shipments in the second quarter of last year.
Third comes Xiaomi. The Chinese brand saw massive growth in sales year over year. It had sold 42.3 million smartphones in the second quarter alone. It’s a big jump from 33.2 million units shipped in Q2 2023, becoming a potential threat to Apple and Samsung.
Apart from this, Vivo also recorded significant growth in the global market. The company’s year-over-year growth in Q2 was 21.9%, with sales listing 25.9 million units with a market share of 9.1%. The growth percentage shows that aggressive marketing and boasting competitive specs into devices is paying off.
Samsung, Apple’s game isn’t over…
Last week, Samsung launched its new foldable phones, releasing on July 24, 2024. Apple, on the other hand, is expected to launch new flagship iPhones in September. It means, Samsung will enjoy the third quarter as well. The fourth quarter might be of Apple as iPhone sales would sharply grow in the global market given the new lineup release.
Samsung is now preparing to unveil new FE products later this year, followed by the S25 series in early next year. Chinese brands are expected to debut their latest flagships in the last quarter of this year, while Google Pixel phones are also coming in August.
Samsung today announced provisional sales and profit results for the second quarter. Samsung formally announced the provisional/predicted sales and operating profit, suggesting a massive profit boom in Q2, 2024 given the AI memory semiconductor rise.
In Q2, 2024, Samsung sales provisionally increased by 2.89% and operating profit by 57.34% compared to the previous quarter thanks to AI boom. Besides, the sales climbed by 23.31% and operating profit by 1,452.24% compared to the same period last year.
The company expects sales of 74 trillion won and operating profit of 10.4 trillion won on a consolidated basis. While these results are not final, there won’t be much change in the final result when it comes out. Samsung had a pretty profitable period in the second quarter.
Samsung in Q2
- Consolidated Sales: Approximately 74 trillion Korean won
- Consolidated Operating Profit: Approximately 10.4 trillion Korean won
The Korean tech giant is currently facing yield issues in its second-generation 3nm process. The flagship Exynos processor is unlikely to be commercialized this year. It would lead the Mobile business to face additional burdens due to rising prices of Snapdragon chipsets.
Meanwhile, Samsung is focussing on HBM (high bandwidth memory) semiconductors. HBM is a key player in artificial intelligence servers and data centers. The booming AI market will directly benefit Samsung’s semiconductor business.
Samsung ranked first in market share in the global smartphone market in Q3, 2023. TrendForce report says that Samsung led the global Q3 smartphone market, recording a market share of 19.5%.
Overall production in the third quarter increased by 11.5% compared to the previous quarter to 60.1 million units. During the same period, Apple’s production increased by 17.9% to 49.5 million, thanks to iPhone 15.
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Third place was taken by Xiaomi (13.9%), followed by Oppo (12.6%) and Transion (8.6%). 6th place is Vivo (8%). Meanwhile, global smartphone production reached 308 million units, a 13% increase compared to the previous quarter and a 6.4% increase from the previous year.
Huawei’s re-entry into the flagship smartphone market targeting Apple has had a significant impact in China. Huawei is aiming to expand its high-end flagship series, focusing on the Chinese domestic market next year, so Apple “We plan to attack directly”.
// Source