Samsung reports Q1 mobile profits just 24% of Apple's
Samsung Electronics reported Q1 operating profits of 6.68 trillion won ($5.81 billion), while its Mobile division reported 3.89 trillion won ($3.38 billion) in profits, both a fraction of the "disappointing" $13.987 billion in operating profits Apple reported for the same quarter.
Source: Samsung
Just 58 percent of Samsung profits in the quarter came from its IT & Mobile Communications (IM) group, which is roughly comparable to Apple's operations. Other divisions of Samsung Electronics include its CE group that sells TVs and appliances and its DS division that includes sales of display panels, semiconductors and memory components.
At the beginning of 2014, IM was contributing 70 percent of the company's profits, primarily from smartphone sales--specifically from sales of its higher end Galaxy S and Note devices.
In 2014, Apple's release of iPhone 6 gutted Samsung's profit center, resulting in a 73.9 percent drop in the Korean giant's mobile profits over the previous year.
Since then, Samsung has struggled to make progress back toward its former profitability in smartphones. Overall profits are just 68 percent of what the company had earned two years ago in Q2 2014, and the company's smartphones contributed significantly less of that.
Apple's overall operating profits for the quarter were $13.987 billion, down 23.5 percent over the year ago quarter. However, despite a decline in iPhone sales in the March quarter (as well as a decline in iPads and a decline in Macs), Samsung IM is still only earning 24 percent of Apple's profits, despite shipping 81.9 million handsets compared to Apple's 51.2 million iPhones.
Samsung's outlook for the June quarter warned of flat demand for smartphones and tablet, "amid weak seasonality," noting a focus on global expansion of S7 sales and maintaining solid profitability of mid to low-end products.
Throughout the rest of 2016, Samsung told investors to "expect smartphone demand growth to slow YoY, while tablet demand to decrease YoY."
Samsung IM is Apple's most profitable competitor, and is by far the largest manufacturer of smartphones.
Source: Samsung
Just 58 percent of Samsung profits in the quarter came from its IT & Mobile Communications (IM) group, which is roughly comparable to Apple's operations. Other divisions of Samsung Electronics include its CE group that sells TVs and appliances and its DS division that includes sales of display panels, semiconductors and memory components.
At the beginning of 2014, IM was contributing 70 percent of the company's profits, primarily from smartphone sales--specifically from sales of its higher end Galaxy S and Note devices.
Peak Galaxy: 2013
In 2014, Apple's release of iPhone 6 gutted Samsung's profit center, resulting in a 73.9 percent drop in the Korean giant's mobile profits over the previous year.
Since then, Samsung has struggled to make progress back toward its former profitability in smartphones. Overall profits are just 68 percent of what the company had earned two years ago in Q2 2014, and the company's smartphones contributed significantly less of that.
Despite selling 60% more more phones, Samsung IM earns 24% of Apple's operating profits
Apple's overall operating profits for the quarter were $13.987 billion, down 23.5 percent over the year ago quarter. However, despite a decline in iPhone sales in the March quarter (as well as a decline in iPads and a decline in Macs), Samsung IM is still only earning 24 percent of Apple's profits, despite shipping 81.9 million handsets compared to Apple's 51.2 million iPhones.
Samsung's outlook for the June quarter warned of flat demand for smartphones and tablet, "amid weak seasonality," noting a focus on global expansion of S7 sales and maintaining solid profitability of mid to low-end products.
Throughout the rest of 2016, Samsung told investors to "expect smartphone demand growth to slow YoY, while tablet demand to decrease YoY."
Samsung IM is Apple's most profitable competitor, and is by far the largest manufacturer of smartphones.
Comments
Market Cap for Apple is $539B and their net profit for the quarter is $13.6B
Seems both company are priced about same comparatively with their earnings.
big deal. Doesn't meant apples results weren't disappointing. They were, and objectively so. Look at the stock price. The guys with skin in the game aren't telling lies.
It it was disappointing.
Market Cap $498B net profit $4B
Apple does not break out net profit by segment but they did say that their Services segment (dominated by the App Store) has very, very high profit margin. If so, this one small Services segment of Apple's business that monetizes a billion active devices might make almost as much money as the entire Alphabet/Google business! And people think Appl is doomed because of a slow down in the smartphone industry!
The same 'investors' that are disappointed with Apple are super excited because Facebook figured out how to sell ads, stock up another 10% after hours, Market Cap now about 340B with quarterly GAAP Net Income of 1.5B.
Make you wonder how companies are valued.
I wish we could go back to the old days of Apple vs. Samsung.
You neglect the elephant in the room that's the real reason why profits are down at both companies, the Chinese phone makers who are willing to make zero to negative profit to take market share and shamelessly copy down to the last pixel, marketing material, and even the dress code of a certain famous founder of a fruit named company.
Apple's quarterly profit was 10.5 billion, not 13.987, even this time last year was less than that at 13.6.
But wait, even then did he just cherry pick Samsung's mobile division (leaving aside Consumer electronics and Display and semi conductor divisions) and compare it to the whole of Apple?
So it doesn't appear that Chinese phone makers can actually have a negative impact on Samsung, except in China, and despite all the hype, it isn't the be-all and end-all of markets. Several of the Chinese flagships use Exynos processors and AMOLED screens, so Samsung is earning a profit off those anyway. Any Chinese phones that use Qualcom's 820 - guess who makes those?
I'll make some predictions:
Ming Kuo is wrong. The iP7 will actually have OLED panels this year. TSMC won't be getting A10 manufacturing exclusivity and that Samsung will continue making A series processors. How are the earthquakes in Austin?
I hope that leaked image of the iP7 is of a mule, because that thing is ugly compared to just about every other high-end phone out there. Put that thing next to an S7 Edge or HTC 10 and it would be an embarrassment.
Let's be reasonable. There *will* be times when performance won't blow the doors off.
It's best to take a longer view of the matter and see how Apple does over the next 1-2 years. A slight decline is no reason to start with all the hand-wringing (mind you, the hand-wringing has been going on since the early part of the last decade.)
Total smartphone sales are about 1.5B/year at present (Apple getting ~250M of those), but total mobile phones are at 2B/year. The total number of mobile users is around 5B and still growing. Apple will continue to grow the iPhone base, leading to ongoing upgrades, services, new users expanding into other devices, etc.