Samsung is one of the phone manufacturers that make a significant
profit (the other being Apple), but this last quarter the South Korean
giant experienced a downturn. The consolidated revenue came out to $44.7
billion, down from $56 billion in Q3 last year. The company marked its
lowest profits since Q3 2011.
The mobile division, which has been the most profitable part of
Samsung in recent years, saw the biggest drop of 15% in sales. However,
the bigger problem is that operating profit slid to $1,653 million, down
from $4,179 million in Q2 this year and $6,350 million a year ago.
Samsung points to a shift in the product mix – it was mostly cheap
and mid-range handsets that sold in this quarter, which lead to a big
drop in the Average Selling Price (ASP). The Galaxy S5 sales dropped off
and the Galaxy Note 4 only came out too late in the quarter.
Tablet sales improved with the launch of the Super AMOLED-packing
Galaxy Tab S tablets, but sales in that segment was not nearly enough to
compensate for the disappointing phone sales. Samsung expects sales of
bot phones and tablets to pick up in the holiday quarter but increased
competition will drive prices down.
Samsung's TV business saw its profits hit almost zero due to lower
ASP and higher prices of the display panels. UHD TVs and especially
Curved TV shipments increased, but again not enough. Speaking of display
panels, Samsung's OLED shipments were weak and strong LCD demand did
not help, profits of this division also nearly zero.
It's only Samsung's semiconductor business that posted increased
sales and profits (both on a yearly and a quarterly basis). There was
strong demand for DRAM and NAND storage for both mobile devices and PCs
with increasing shipments of 20nm DRAM chips and 10nm/3-bit NAND. All
this made the semiconductor business the most profitable division of
Samsung.
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