Samsung reports Q1 mobile profits just 24% of Apple's

Posted:
in iPhone edited April 2016
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.

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.
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Comments

  • Reply 1 of 26
    So.... are they doomed???
    quadra 610cnocbui
  • Reply 2 of 26
    At this point, it has become quite trite to say, nevertheless: It's all relative to expectations. Period. 
    aaron sorensonquadra 610wonkothesane
  • Reply 3 of 26
    At this point, it has become quite trite to say, nevertheless: It's all relative to expectations. Period. 
    unfortunetly most people's expectations are based on almost zero knowledge.
    edited April 2016 calichianetmageSpamSandwichmdriftmeyerjbdragonmagman1979jahbladeredgeminipa
  • Reply 4 of 26
    fallenjtfallenjt Posts: 3,976member
    Great...try to add more gimmicks to Galaxy lines, you may sell some phones.
    baconstang
  • Reply 5 of 26
    shahhet2shahhet2 Posts: 143member
    Market Cap of Samsung is $152B and their net profit for the quarter is $4.6B
    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.
    xTradaTradecnocbuifreshmaker
  • Reply 6 of 26
    mubailimubaili Posts: 387member
    well,not sure why we should care. For Apple to be great, Apple has to surprise/delight its users and produces insanely great products. I was hoping Apple would steer clear to this narrative during their quarterly earnings call. We, Apple users, don't care about anything else.
    xiamenbillcaliroger wade
  • Reply 7 of 26
    djsherlydjsherly Posts: 1,016member
    This is ded looking at apple's disappointing results and saying, "well these guys are worse".

    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. 
    cnocbuiroger wadefreshmaker
  • Reply 8 of 26
    robjnrobjn Posts: 203member
    shahhet2 said:
    Market Cap of Samsung is $152B and their net profit for the quarter is $4.6B
    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.
    Compare Goog
    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.
    calichiaradarthekatronnpalominemdriftmeyerbaconstangpscooter63magman1979redgeminipa
  • Reply 9 of 26
    sirlance99sirlance99 Posts: 1,142member
    So Samsung went up YoY and QoQ but ded just couldn't say that throughout the entire article? Not even once? Just that Samsung didn't make as much money even though they still made a heck of a lot of money. 
    singularitycnocbuicroprfreshmaker
  • Reply 10 of 26
    Nice try. Must have thrown more darts, might help a little bit more.
  • Reply 11 of 26
    Still blowing the horn of the Frenemies theme, eh?

    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.
    roger wademagman1979jahblade
  • Reply 12 of 26
    ah06ah06 Posts: 1member
    Umm I get the website is very hardcore Apple but DED should at least give his 'perspective' or 'opinion' rather than flat out lies.

    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?


    singularity
  • Reply 13 of 26
    cnocbuicnocbui Posts: 3,613member
    Still blowing the horn of the Frenemies theme, eh?

    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.
    DED couldn't bring himself to point out that Samsung's earnings are actually up 12%.  'Samsung's revenue climbs 12% while Apple's falls 13%'   Doesn't quite have the necessary spin.

    * Mobile division is top earner for first time in 7 quarters

    * Firm cites "robust" Galaxy S7 sales, better lower-tier profits

    Tech giant Samsung Electronics Co Ltd on Thursday tipped a pickup in second-quarter profits after reporting a 12 percent earnings gain in January-March on the back of "robust" sales of its Galaxy S7 smartphones. The mobile division was the South Korean firm's biggest earner for the first time since the second quarter of 2014...

    Boasting an improved camera, waterproofing and microSD storage support, Galaxy S7 models are on track to set a new first-year shipments record, lifting hopes the mobile business will post its first annual profit gain in three years. The firm said inventory levels remain low for the new models, suggesting good momentum.

    "In the second quarter we expect our solid performance to continue," Samsung investor relations chief Robert Yi said during a post-earnings conference call, adding the firm was "cautiously optimistic" that operating profit would increase quarter-on-quarter.

    Samsung's January-March operating profit was 6.7 trillion won ($5.84 billion), slightly above with its earlier estimate of 6.6 trillion won. Revenue rose 5.7 percent to 49.8 trillion won, compared with its guidance for 49 trillion won.

    Profit for the smartphone division jumped 42 percent from a year earlier to 3.9 trillion won, an almost two-year high. Samsung said it expected further sales growth for its Galaxy S7 devices in the second quarter as well as from its mid-to-low tier products, flagging improved profitability on lower-end models such as the Galaxy A and J series.

    The firm expects second-quarter mobile shipments, including non-smartphones, to fall slightly from 92 million units in January-March, partly as older smartphone models are phased out. Average sales prices will rise slightly, however.

    Market researcher TrendForce says combined shipments for flat- and curved-screen S7 models will reach 52 million by the year-end, surpassing the previous record of 47 million sets by the Galaxy S4.

    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.

    edited April 2016 singularityroger wade
  • Reply 14 of 26
    ah06 said:
    Umm I get the website is very hardcore Apple but DED should at least give his 'perspective' or 'opinion' rather than flat out lies.

    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?


    Um... (1) Learn the difference between 'operating profit' and 'profit.' (2) DED shows you the data for all three divisions clearly, and up front. What more do you need?
    ronnnetmagebaconstangpscooter63magman1979calijahblade
  • Reply 15 of 26
    lkrupplkrupp Posts: 6,819member
    So what? I mean ,really, so what? As one poster reminds us it’s all about expectations and perceptions. Expectations are irrationally high for Apple and anything that tarnishes those expectations becomes fodder for clickbait. For whatever reason the financial world has been portraying Apple as a failed company on its way out for years now. Every time Apple beat their predictions they simply retreated and came out swinging again the next quarter. You can’t fight expectations and perceptions with facts or logic.
    netmagebaconstangmagman1979calijahblade
  • Reply 16 of 26
    Meh. After 7 straight quarters of declines. A quarter or two of modest increases doesn't mean much. Going up 12% this year is tempered by the fact that last year they were down a whopping 40%.
    baconstangcali
  • Reply 17 of 26
    quadra 610quadra 610 Posts: 6,743member
    Apple's usual:



    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.)
    magman1979anantksundaram
  • Reply 18 of 26
    gatorguygatorguy Posts: 20,301member
    Apple's usual:



    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.)
    Spot on. There's always "that quarter". The concerns and hand-wringing are misplaced unless/until "that quarter" becomes the norm. I don't see that happening soon. 
    edited April 2016 quadra 610
  • Reply 19 of 26
    brucemcbrucemc Posts: 1,526member
    Apple's usual:



    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.)
    100% agree.  This isn't the first time that Apple's iPhone was foretold by bloggers & pundits to have peaked (a quick search turns up articles from 2-3 years ago with exactly the same meme - except that Apple has increased iPhone sales levels 40% since then...). Slowing growth is inevitable, but growth is still expected provided Apple focus' on "delighting" the customer & making premium products.

    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.
    quadra 610
  • Reply 20 of 26
    rogifan_newrogifan_new Posts: 3,837member
    So AI is writing about Samsung to deflect from Apple's meh quarter? Let's face it the sentiment on Apple right now is certainly not bullish. And Tim Cook and Apple PR have never been good at changing narratives. I hate when my Twitter feed is full of pro-Apple writers/bloggers tweeting about other companies products (like the new all metal Retina display chrome book from HP that starts at $499. I hope Apple has some big surprises to announce at WWDC. 
    freshmakersingularitydasanman69
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