Samsung forecasts 50pc operating profit increase ahead of Galaxy S8’s global launch

Updated on 07-Apr-2017
HIGHLIGHTS

Samsung's buoyant Q1 2017 results is based on strong chip and display sales, showing strong signs of recovery from 2016's Galaxy Note7 fiasco.

Samsung shows strong signs of resurgence, marking a phase of optimism ahead of the Galaxy S8 lineup's global sales debut on April 21. On Thursday, the company's financial report stated strong forecasts with 50 percent year-on-year rise in operating profits, with revenue remaining constant. These figures show strong recovery from 2016's Galaxy Note7 fiasco, which itself occurred at a time when Samsung was enjoying a strong run based on the Galaxy S7 lineup's success.

The latest report states operating profit for Q1 2017 to be around $8.8 billion, while total sales is quoted at $44.1 billion. The latest figures show significant increase from Q1 2016, and gradual improvement on Q4 2016 – which shows Samsung's confidence behind its new flagship smartphones, the Galaxy S8 and S8+. The Samsung Galaxy Note7, unveiled last year, was pegged by a design and element flaw that led to its batteries exploding, causing a global recall that cost Samsung an estimated $17 billion in terms of profits. This also allowed Apple to regain its status as the leading global smartphone vendor for the first time since Q4 2014.

Samsung's strong fightback was buoyed by its component business. Alongside its consumer technology businesses, Samsung also happens to be the world's largest maker of memory chips, and stands second in the processor-making industry. Alongside, it is also believed to have received orders for supplying 70 million OLED display panels to Apple for the upcoming Anniversary Edition iPhone, leading to strong profits from its seemingly less glamorous division. It is this that helped see Samsung through the tough Galaxy Note7 phase, and even led the company to posting its highest operating profits till then.

The upcoming Galaxy S8 and S8+ present a number of interesting elements like an all-new Infinity Display, top-of-the-line processors and an AI-powered assistant named 'Bixby'. These factors have led to strong optimism around the flagship smartphones, which combined with Samsung's component business is what is leading the company to strong profit forecasts. The two smartphones will also give Samsung considerable lead in the cut-throat flagship smartphone competition, which awaits Apple's entry with the Anniversary Edition iPhone, also believed to present radical changes in terms of design, along with advanced technologies like an under-display haptic button, OLED displays and more.

The Samsung Galaxy S8 and S8+ will go on sale in global market from April 21, which makes Samsung's Q3 2017 reports worth looking out for in terms of how much the smartphones increase profitability.

Digit NewsDesk

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