Samsung outlined plans to capitalise on 5G network wins in the US and South Korea to boost its networks business, while reporting flat handset shipments and a double-digit decline in revenue at its Mobile Communications business in Q3.
On a conference call, Robert Yi, EVP of Investor Relations, said the company was ready to “establish our position at the forefront of the 5G era” with the company on the hunt for new markets for its network equipment.
Without offering specific numbers, the company said handset shipments were “broadly flat” in Q3, though it expected growth in Q4 with the launch of the A7 and A9 handsets into the mid- to low-tier segment. However, it noted the profitability for the division would continue to decline. Yi explained: “Profitability is expected to weaken due to an increase in marketing expenses as we enter the peak season.”
In Q3, Samsung’s Mobile business generated revenue of KRW24 trillion ($21.1 billion) revenue, down 12 per cent year-on-year. The company said the drop was mostly due to “intensified competition”.
Mobile Communications VP Kyeong Tae Lee noted device sales were also impacted by the discontinuation of some models, while profit had declined due to “unfavourable foreign exchange rates” in some regions and the cost of promotion for the Galaxy Note 9.
Looking further ahead, Lee said diversifying its lineup in the premium segment through innovations including 5G compatibility and folding phones would increase demand, as would the inclusion of high-end features in lower-tier handsets.
Samsung’s IT and Mobile Communications division generated pre-tax profit of KRW2.2 trillion, up 1 per cent year-on-year.
Net profit is reported on a company-wide basis, including its many other consumer and business electronics divisions, and stood at KRW13 trillion, up 20 per cent year-on-year.Subscribe to our daily newsletter Back