As expected, Samsung has exhibited robust performance in the second quarter of this year with the handset business being the clear winner. The earnings release sent out today shows that the mobile division’s operating profit surged by 57 percent in the second quarter mostly because the Galaxy S7 series has proven to be a massive hit. Market data showed that it shipped more than 80 million handsets in Q2 to remain the world’s largest smartphone vendor. Samsung certainly wants to keep this momentum going and it has detailed in its earnings release just how it’s going to go about that.
The company does mention in the earnings release that the handset division’s fortunes improved quarter-over-quarter due to strong sales of the Galaxy S7 and Galaxy S7 edge. It improved its overall product mix by raising sales proportion of the Galaxy S7 edge to over 50 percent. The company also attributed growth in the second quarter to maintaining profitability of mid to low-end models like the Galaxy A and J series. Samsung forecasts demand for smartphones to increase in the second half of this year but recognizes that market competition is going to get tougher as other companies come out with new devices. The upcoming iPhone is expected to arrive in September and it will directly compete with Samsung’s flagship handsets. Despite the threat of increased competition, Samsung is going to focus on increasing earnings year-over-year by strengthening its high-end lineup and maintaining robust profitability of mid to low-end devices.
Samsung says that the release of the Galaxy Note 7 is going to help maintain solid sales of high-end smartphones in the third quarter of this year. It will certainly be aided by the Galaxy S7 and the Galaxy S7 edge that will remain their flagship status until the Galaxy S8 comes out early next year. Samsung will also be focusing on expanding smartphone sales including its new Galaxy A and J series as well as the China-specific Galaxy C series. The company is also going to focus on increasing sales during the strong holiday season later this year with the launch of a new model but it also expects marketing expenditure to increase during that time.
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