Samsung Expects Smartphone Market Bump

Samsung’s device solutions unit accounted for the bulk of a 17% rise in sales during Q3. The growth has matched the company’s preliminary expectations.

Overall revenue of KRW79.1 trillion ($57.4 billion) comprised KRW45 trillion from its device experience division and KRW29.3 trillion from the solutions unit. Although the latter figure is smaller, growth of 78% eclipsed the 2% of the former unit. More pertinent, the device solutions unit’s contribution to operating profit grew 7.6% to KRW3.9 trillion while the experience division remained flat at KRW3.4 trillion. Operating profit as a whole grew 6.8% to KRW9.2 trillion, matching Samsung’s initial expectations. Net profit rose 12.8% to KRW10.1 trillion.

Samsung backed the current quarter to deliver a bump in smartphone demand, which it noted in earnings materials had increased only slightly during Q3, albeit sufficient to drive gains in revenue and operating profit. There was a trend towards flagship models which the company noted helped offset rising materials costs, but it tipped the mass market to be its driver in the current period.

Samsung’s memory business recorded strong demand in AI and conventional servers, though it highlighted some issues around inventory adjustments. The segment will remain steady in the current quarter, with the vendor concerned about the geopolitical landscape and the possible impact of stimulus packages. There is an expectation the memory business will also make gains as more smartphones are equipped with AI features.