The pandemic-caused lull in demand for phones appears to be over, a minimum of for Samsung. the corporate on Wednesday reported its highest ever quarterly revenue, because of “significant increase in consumer demand” for its smartphones, computers and other products.
The company reported its third-quarter operating profit soared 59% from the previous year to 12.35 trillion won ($10.9 billion), while its net income jumped to 9.36 trillion won ($8.2 billion) from 6.29 trillion won. Sales climbed 8% to 66.96 trillion won ($59 billion), better than the 64.7 trillion won ($57 billion) expected by analysts polled by Thomson Reuters.
Samsung said it saw “a boost in demand for smartphones and consumer electronics also as efficient cost management.” It also benefited from stronger sales of memory chips and other consumer products. “Even because the COVID-19 pandemic continues round the world, reopening of key economies led to significant increase in consumer demand,” Samsung said during a handout .
Still, Samsung warned its rebound could also be short-lived. the corporate expects its profit to say no for the last three months of the year as server customers buy fewer memory chips and as competition heats up in smartphones and other consumer electronics. Apple, especially , are going to be a troublesome rival for Samsung this quarter. the corporate introduced four new iPhones, all of which accompany 5G connectivity.
Samsung does expect 2021 to be better for the industry . the corporate predicted “a recovery in overall global demand” but noted that “uncertainties will remain over the likelihood of recurring epidemic waves of COVID-19.”
Samsung could also be referred to as an enormous in phones and TVs, but it also has huge businesses making components like memory chips. the corporate has counted on its components business to buoy its revenue, while its other electronics have struggled. Since the novel coronavirus pandemic began, Samsung’s chip business has gotten a lift from data centers that believe the technology to store everything we’re doing online. But the smartphone sector boomed back within the third quarter, both in terms of handset sales and therefore the memory chips utilized in those devices.
“Overall market demand increased within the third quarter as stimulus measures helped many economies recover following lockdowns during the second quarter,” Samsung said. “The company’s smartphone sales rose sharply from the previous quarter, with the launch of latest flagship models like the Galaxy Note 20 and Galaxy Z Fold 2, also as stronger sales of mass-market models in key regions including India.”
A phone rebound
2020 was alleged to be a robust year for the phone industry, as innovations like 5G and foldable screens got people shopping again. Instead, financial struggles and worries about COVID-19 will limit the amount of devices companies can make and the way many phones people will actually buy.
Samsung was one among the primary companies to release a phone with 5G, but it has been surpassed by Huawei. The Chinese handset maker became the most important smartphone vendor within the world within the second quarter, the primary time in nine years that Samsung or Apple hasn’t held that title. And analysts expect Apple to become the world’s second biggest 5G phone vendor this year — with but three months of sales. That puts Samsung, once the leader with the new connectivity, in third place.
Samsung also has shifted its plans to affect changing consumer preferences during the pandemic. In September, it introduced the Galaxy S20 FE, a less expensive model for its flagship smartphone lineup. The phone starts at $700 phone — $300 but the regular S20 costs — and comes because the pandemic prompts demand for fewer expensive devices.
That plans appear to be working. Samsung said sales in its mobile business climbed 6.1% from the previous year to 29.81 trillion won ($26.3 billion). the extent is up a whopping 51% from the second quarter, when the pandemic hurt demand. Samsung attributed the climb to demand for its new flagship products.
It also noted that it cut marketing expenses. And within mobile, sales increased for Samsung’s new tablets and wearables including the Galaxy Tab S7, Galaxy Watch 3 and Galaxy Buds Live.
Samsung’s consumer electronics division saw sharp growth in sales of premium TVs and appliances.
At an equivalent time, Samsung’s components business continues to ascertain strong demand. While chip prices fell, strong demand for phones and PCs led to higher-than-expected shipments. the corporate also benefited from the sale of other components for smartphones, and its business manufacturing processor for patrons got a lift from chip designers making parts for data centers.
Earlier this month, Samsung said it expected its third quarter profit jumped 58% to 12.3 trillion won. It also projected its revenue increased by nearly 5% to 66 trillion won. Both amounts were above Wall Street’s consensus estimates at the time.