Apple rival Samsung posts high Q2 profits on rebounding phone division

Posted:
in General Discussion
Korea's Samsung on Thursday reported its highest quarterly profits in two years -- likely based on smartphones, despite intense competition from Apple and Chinese firms like Huawei.




Although the company won't post in-depth results until later this month, Samsung said that its Q2 profits are estimated to have grown 17.4 percent year-over-year to 8.1 trillion won ($7 billion), according to Reuters. The company's mobile division is thought to have been the top profit driver.

It took hits from several directions in 2015, as Apple ate into high-end phone sales with the iPhone 6 and 6 Plus, while Chinese firms advanced into the budget market. The Galaxy S6 meanwhile had a botched launch, with too few of the most popular models available.

The company responded by streamlining its product lineup -- thereby improving profit margins -- and releasing the Galaxy S7, which has proven the success it was originally hoping for from the S6.

The iPhone 6s and 6s Plus also haven't been as popular as might have been anticipated. Apple posted its first-ever decline in iPhone sales during the March quarter, and multiple suppliers have indicated that the company is holding back on orders, at least for anything prior to this fall's "iPhone 7."
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Comments

  • Reply 1 of 28
    macxpressmacxpress Posts: 4,681member
    So did it apparently grow $7 Billion, or are profits $7 Billion total? If its $7 Billion total thats a drop in the bucket compared to iPhone profits, even with lower sales.
    igorskylolliver
  • Reply 2 of 28
    stanthemanstantheman Posts: 311member
    Samsung 'buys' conpinents from one of its own divisions to manufacture phones. That means if it gets a great 'bargain' on components, the phone division will be more profitable and the components division will be less profitable. Now, I'm sure that Samsung execs are too ethical to manipulate its earnings report, but this week's news has reported that profits from Samsung's components division are weaker than expected, while earnings from phones have been stronger than expected.
    EsquireCatscaliretrogustoDeelronGrimzahnigorskybadmonkSpamSandwichbaconstangchia
  • Reply 3 of 28
    maestro64maestro64 Posts: 4,371member
    Samsung 'buys' conpinents from one of its own divisions to manufacture phones. That means if it gets a great 'bargain' on components, the phone division will be more profitable and the components division will be less profitable. Now, I'm sure that Samsung execs are too ethical to manipulate its earnings report, but this week's news has reported that profits from Samsung's components division are weaker than expected, while earnings from phones have been stronger than expected.

    Yes it is all a shell game, increase profits could have come from any number of their business units, keep in mind the statement is based on a Reuters report not an actually statement from Samsung. They only said they dropped products and streamline costs. This does not increase profits by 17%. We also know that Samsung as heavily engaged on BOGO activities this last quarter they were trying to move phones anyway they could. I am not sure how you grow profits when you are giving stuff away.
    caliigorskybadmonkSpamSandwichlolliverpatchythepirate
  • Reply 4 of 28
    igorskyigorsky Posts: 422member
    Samsung 'buys' conpinents from one of its own divisions to manufacture phones. That means if it gets a great 'bargain' on components, the phone division will be more profitable and the components division will be less profitable. Now, I'm sure that Samsung execs are too ethical to manipulate its earnings report, but this week's news has reported that profits from Samsung's components division are weaker than expected, while earnings from phones have been stronger than expected.
    And Apple buys components from suppliers in huge quantities at really good prices, so your point really is negated. Can't you just admit that the Samsung Galaxy S7 has actually been selling well?
    All your reply did was make it painfully obvious that you didn't understand @stantheman 's point all.  Apple doesn't buy discounted components from itself...get it?
    edited July 2016 rob53calinolamacguyDeelronbaconstanglolliverkevin kee[Deleted User]waverboy
  • Reply 5 of 28
    ericthehalfbeeericthehalfbee Posts: 3,920member
    "Although the company won't post in-depth results until later this month"

    I think you meant to say "Although the company will NEVER post in-depth results"

    Samsung will release an overall "smartphone" shipment number that will sound impressive save for the fact it includes lots of phones in the $100-200 range. And they won't tell us how many S7 variants were sold but will "imply" that the S7 is responsible for the increase in revenues/profits.
    edited July 2016 retrogustoDeelronigorskybaconstanglolliver
  • Reply 6 of 28
    xbitxbit Posts: 224member
    Samsung is doomed?  :p
    cnocbuiigorskySpamSandwichbaconstang
  • Reply 7 of 28
    sirlance99sirlance99 Posts: 1,110member
    maestro64 said:
    Samsung 'buys' conpinents from one of its own divisions to manufacture phones. That means if it gets a great 'bargain' on components, the phone division will be more profitable and the components division will be less profitable. Now, I'm sure that Samsung execs are too ethical to manipulate its earnings report, but this week's news has reported that profits from Samsung's components division are weaker than expected, while earnings from phones have been stronger than expected.

    Yes it is all a shell game, increase profits could have come from any number of their business units, keep in mind the statement is based on a Reuters report not an actually statement from Samsung. They only said they dropped products and streamline costs. This does not increase profits by 17%. We also know that Samsung as heavily engaged on BOGO activities this last quarter they were trying to move phones anyway they could. I am not sure how you grow profits when you are giving stuff away.
    Samsung doesn't do the BOGOs, the carrier's do. Also there are plenty of BOGOs for iPhones as well. I see BOGOs for iPhones everyday. 
    cnocbui
  • Reply 8 of 28
    macxpressmacxpress Posts: 4,681member
    igorsky said:
    And Apple buys components from suppliers in huge quantities at really good prices, so your point really is negated. Can't you just admit that the Samsung Galaxy S7 has actually been selling well?
    All your reply did was make it painfully obvious that you didn't understand @stantheman 's point all.  Apple doesn't buy discounted components from itself...get it?
    Its hard to see someone's point when Android fanboy'ism overshadows you....They signed up just to say that so its obvious what side they're on. 
    calilolliver
  • Reply 9 of 28
    ericthehalfbeeericthehalfbee Posts: 3,920member
    Samsung 'buys' conpinents from one of its own divisions to manufacture phones. That means if it gets a great 'bargain' on components, the phone division will be more profitable and the components division will be less profitable. Now, I'm sure that Samsung execs are too ethical to manipulate its earnings report, but this week's news has reported that profits from Samsung's components division are weaker than expected, while earnings from phones have been stronger than expected.
    Add it all up and your conjecture is wishful thinking. The Samsung Galaxy S7 is clearly selling.


    Yet Samsung has NEVER given us any S7 sales figures. Do you remember when Samsung was always releasing statements about the sales numbers for their Galaxy S class phones? Every milestone they hit (10, 20, 30 million) was followed by a press release. They also loved to talk about how many days/months it took to hit 10 million sales (The S2 took 5 months, the S3 took 55 days and the S4 only 29 days). They even have a "10 million seller" page at their site which lists all the devices that have "made the club".

    The last time Samsung released any figures was in Feb 2014 when they announced they had sold a total of 200 million Galaxy S class phones. Sounds impressive until you realize the iPhone had sold 413 million over the exact same time period that the Galaxy S devices were available. Since then the gap between iPhone and Galaxy would have been even wider, considering Samsung phone sales slumped for 7 consecutive quarters while Apple continued to put up record numbers.

    So yes, the S7 is selling, but it's doubtful that it's some runaway sales success. 
    caliDeelronigorskybaconstanglolliver[Deleted User]propod
  • Reply 10 of 28
    calicali Posts: 3,495member
    In reply to the above,

    it warms my heart to hear about all these iKnockoff manufacturers biting the dust and the possibility of bankruptcy is music to my ears.

    its just sad that the dirtiest companies in the industry are still in the game.
    igorskylolliver
  • Reply 11 of 28
    Rayz2016Rayz2016 Posts: 4,520member
    Good.

    Apple certainly need the competition. 

    An unpopular opinion I'm sure, but Apple does some of its best work when its fighting hardest. 

    Probably the same for any company really. 

    What hapens when a company has no one to compete against? Ask Microsoft. 
    cnocbuibaconstangwaverboy
  • Reply 12 of 28
    george ligeorge li Posts: 30member
    Samsung moved up its S7 release date this past quarter, therefore the "rebound" when compared to weak last year's result. I won't be surprised that in the next few quarters, Samsung is going to have a hard time.
    igorsky
  • Reply 13 of 28
    gatorguygatorguy Posts: 19,718member
    "Although the company won't post in-depth results until later this month"

    I think you meant to say "Although the company will NEVER post in-depth results"

    Samsung will release an overall "smartphone" shipment number that will sound impressive save for the fact it includes lots of phones in the $100-200 range. And they won't tell us how many S7 variants were sold but will "imply" that the S7 is responsible for the increase in revenues/profits.
    No one posts individual model sales do they? I don't recall any. They're simply lumped together as smartphones, or Galaxy phones or iPhones with no specific model breakouts. Almost everyone implies their flagship is their best-seller. 
    cnocbui
  • Reply 14 of 28
    k2kwk2kw Posts: 1,527member
    Samsung 'buys' conpinents from one of its own divisions to manufacture phones. That means if it gets a great 'bargain' on components, the phone division will be more profitable and the components division will be less profitable. Now, I'm sure that Samsung execs are too ethical to manipulate its earnings report, but this week's news has reported that profits from Samsung's components division are weaker than expected, while earnings from phones have been stronger than expected.
    Their component division is down because the make some of the A series chips for Apple. 

    The S7 is a beautiful design.  The iPhone 6/6s is Meh.  The iPhone six sold big numbers because of the screen size increase despite a lame design.

    Thats why Samsung is up and apple is struggling.
    edited July 2016 cnocbui
  • Reply 15 of 28
    ericthehalfbeeericthehalfbee Posts: 3,920member
    gatorguy said:
    "Although the company won't post in-depth results until later this month"

    I think you meant to say "Although the company will NEVER post in-depth results"

    Samsung will release an overall "smartphone" shipment number that will sound impressive save for the fact it includes lots of phones in the $100-200 range. And they won't tell us how many S7 variants were sold but will "imply" that the S7 is responsible for the increase in revenues/profits.
    No one posts individual model sales do they? I don't recall any. They're simply lumped together as smartphones, or Galaxy phones or iPhones with no specific model breakouts. Almost everyone implies their flagship is their best-seller. 

    Did you miss my other post that explains Samsungs history of actually providing sales milestones for their Galaxy S models? Or that Samsung sells a lot of cheap phones? Apple only sells flagships. Samsung sells flagships, but the majority of their sales are low-end. That's why their ASP is in the low $200 range.
    lolliverpatchythepirate
  • Reply 16 of 28
    TuuborTuubor Posts: 27member

    Jeknetwork. Dude. You really need to chillax with your novel writing. These are only mobilephones and tech companies.
    edited July 2016
  • Reply 17 of 28
    rogifan_newrogifan_new Posts: 3,679member
    gatorguy said:
    No one posts individual model sales do they? I don't recall any. They're simply lumped together as smartphones, or Galaxy phones or iPhones with no specific model breakouts. Almost everyone implies their flagship is their best-seller. 

    Did you miss my other post that explains Samsungs history of actually providing sales milestones for their Galaxy S models? Or that Samsung sells a lot of cheap phones? Apple only sells flagships. Samsung sells flagships, but the majority of their sales are low-end. That's why their ASP is in the low $200 range.
    Apple only sells flagships? Tell that to people in India.
  • Reply 18 of 28
    igorskyigorsky Posts: 422member
    k2kw said:
    Samsung 'buys' conpinents from one of its own divisions to manufacture phones. That means if it gets a great 'bargain' on components, the phone division will be more profitable and the components division will be less profitable. Now, I'm sure that Samsung execs are too ethical to manipulate its earnings report, but this week's news has reported that profits from Samsung's components division are weaker than expected, while earnings from phones have been stronger than expected.
    Their component division is down because the make some of the A series chips for Apple. 

    The S7 is a beautiful design.  The iPhone 6/6s is Meh.  The iPhone six sold big numbers because of the screen size increase despite a lame design.

    Thats why Samsung is up and apple is struggling.

    Opinions can't be used as evidence, fyi.
    edited July 2016
  • Reply 19 of 28
    igorskyigorsky Posts: 422member

    Did you miss my other post that explains Samsungs history of actually providing sales milestones for their Galaxy S models? Or that Samsung sells a lot of cheap phones? Apple only sells flagships. Samsung sells flagships, but the majority of their sales are low-end. That's why their ASP is in the low $200 range.
    Apple only sells flagships? Tell that to people in India.
    Can someone translate this for me?
    edited July 2016
  • Reply 20 of 28
    cnocbuicnocbui Posts: 3,613member

    Did you miss my other post that explains Samsungs history of actually providing sales milestones for their Galaxy S models? Or that Samsung sells a lot of cheap phones? Apple only sells flagships. Samsung sells flagships, but the majority of their sales are low-end. That's why their ASP is in the low $200 range.
    Apple only sells flagships? Tell that to people in India.
    Who aren't buying them because they are mostly flagships, apart from the SE,  and are too expensive for the vast majority of the population.  Even the SE is too expensive for that market, hence Apple's efforts to dump used phones.
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