Samsung profits rise as recovery beckons
Published 08/04/2015 | 02:30
Samsung looks to have emerged from its recent slump with expected quarterly profits of €5bn set to hit a nine month high water mark for the company.
Despite being 31pc lower than the same quarter of last year, the €5bn profit is being seen as a sign that the Korean giant has turned the corner on a lacklustre 18 months which has seen it cede top spot to Apple in the global smartphone market.
Two-thirds of Samsung's income comes from its mobile division. The company's financial recovery is expected to accelerate with the launch of its latest flagship smartphone, the Galaxy S6, below. After criticism that its phones look cheap and are too complicated to use, Samsung ditched plastic, using metal and glass for the new flagship smartphone's body.
The company also removed many apps that were installed on the phones that critics said cluttered screen space without being useful.
Researcher Counterpoint expects Samsung to sell more than 50m units of the new devices to consumers this year, a new record for the company.
Solid demand for semiconductor devices that are used as components for mobile gadgets will also help drive a recovery in Samsung's profits, according to analysts.
Samsung is the world's largest maker of memory chips. For the upcoming Galaxy S6 smartphone, the company is supplying its own mobile processor that works as the brain of the phone.
For all of 2015, profit is likely to rise 6pc to 26.5 trillion won (€22bn), according to a economic analysts.
Ireland's recently appointed Samsung boss, Conor Pierce, said that fierce competition is good for the company.
"The more competition the better," he said. "It keeps us on our toes and prevents the market from going stale."
Samsung's recovery comes after rival smartphone maker HTC continued to stumble, with an unaudited net profit of €10.5m for the first quarter of 2015.
Despite being higher than the same quarter last year, the once-dominant handset manufacturer is being squeezed by high-end rivals Samsung and Apple and emerging competitors such Huawei and Lenovo.
The Taiwan-based firm recently changed its chief executive in a bid to improve its fortunes.