Samsung returns to handset shipment growth - Mobile World Live

Samsung returns to handset shipment growth

29 OCT 2015

Samsung saw quarterly mobile phone shipment growth in Q3, although changes in product mix meant that mobile revenue did not increase by the same extent.

The company said that “strong” growth to 105 million units from 89 million in the second quarter of 2015 was accompanied by a “slight” increase in revenue, to KRW26.61 trillion ($23.2 billion) from KRW26.06 trillion.

It also said that profitability declined sequentially due to a “price adjustment” related to its flagship Galaxy S6 line and change in product mix. It declined 13 per cent quarter-on-quarter.

Smartphones made up around 80 per cent of total device shipments.

The year-on-year numbers were more impressive. Operating profit in the IM unit, of which mobile is the lion’s share, increased 37.1 per cent to KRW2.40 trillion, on revenue of KRW26.61 trillion, up 8.3 per cent.

There were a number of positives highlighted by the company, which has seen its mobile unit under pressure for some time.

“Our large screen flagship models, Galaxy Note 5 and Galaxy S6 Plus, newly released in the third quarter, are receiving positive feedback from the market. Accordingly we expect shipments to exceed their predecessors,” JinYoung Park, VP of the mobile communications business at Samsung, said.

It also noted growing sales for its Galaxy A series, with its large-screen A8 picking up buyers in China and Southeast Asia, and its J series performing well in emerging markets.

Third quarter tablet sales were flat at 8 million.

Looking forward, the company is looking to capitalise on seasonal growth to drive shipment volumes and sales, although it also noted that marketing expenses will increase, and it will “focus on maintaining solid earnings by expanding shipments and by managing expenses efficiently”.

And with a focus on 2016, Park acknowledged that with smartphone market growth set to slow, and competition remaining fierce, “there may be some difficulties with our business,” but “we will respond to tough market circumstances by strengthening our premium product competitiveness while maintaining our key strategy of optimised product portfolio”.

On a group level, net income increased 29.4 per cent to KRW5.46 trillion, on revenue up 8.9 per cent to KRW51.68 trillion.

Samsung also announced plans to buyback and cancel around $10 billion of its own shares, noting that it believes it is currently “severely undervalued”.

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