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Samsung Electronics profit beats expectations on robust sales of S7 smartphone

Increased sales Samsung's Indian market share rose to 30% as of February this year from 28.6% in the fourth quarter of 2015. — Reuters

Where to now? Samsung's sure to fill in other market segments with affordable phones and tablets, though analysts suggest they'll look to improve performance for their second handset - the Galaxy Note 6 - by launching it a month earlier than expected this year.

Samsung Electronics Co. forecast a better-than-expected performance for its first quarter, with sales of its latest flagship Galaxy S7 phones off to a good start. "Greg Roh, a market analyst at HMC Incestment Securities, told USA Today that the S7's initial sales "[were] least 1.5 times better than the Galaxy S6". The solid profits aren't simply a sign that Samsung is fending off its competitors - lower marketing spending for the mobile business also helped bolster the bottom line. While Samsung didn't provide specific details about what drove the results, it's likely that the firm benefited from the recent launch of its flagship Galaxy S7 smartphone as well as potentially lower operating expenses for the mobile division.

Some market watchers believe the Galaxy S7's success will influence future Samsung device releases. The main factor which is making it hard for Samsung to introduce the features into it is the Note series most valuable feature - "S Pen".

For the corresponding quarter a year ago, Samsung's operating profit stood at 6tn won.

The popularity of the S7, as well as a refreshed portfolio of cheaper Galaxy models, such as the A and J series, have given the division's earnings a shot in the arm.

"We expect the Galaxy S7 to be the world's best-selling Android smartphone in 2016", said Neil Mawston, executive director at Strategy Analytics Inc.

The company will release its finalized earnings later this month.

Samsung's chip unit, which accounts for roughly half of the company's total profits, likely saw its first profit decline in more than three years, dealing a blow to the bottom-line, as chip prices weakened amid an oversupply.

Samsung may be on the verge of executing a sudden turnaround in its financial fortunes after predicting a rise in its quarterly operating profits.

According to a survey by analyst firm Counterpoint Research, the Galaxy S7 and its Edge variant have sold more than 10 million units over the past month since their global launch on March 11.


Source: Samsung Electronics profit beats expectations on robust sales of S7 smartphone

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