Apple Part Sales Help Boost Samsung Profits

Electronics giant Samsung has posted a surge in quarterly earnings as profits from sales of components – including to rival Apple – masked disappointment in its smartphone business.


Operating profit was up 82% to 7.4 trillion won (£4.2bn), partly boosted by currency movements.

Sales of 51.7 trillion won (£29.7bn) were 9% higher but profits from Samsung’s smartphone business fell compared to the second quarter  – though they were higher year-on-year – after it cut prices for some of its high-end Galaxy handsets.

This was despite the company releasing premium models more quickly than in previous years and expanding those using curved screens.

Volume sales and revenues from its own phones were higher but the growth came from cheaper models.

South Korea’s Samsung phone sales have been squeezed in the last year by the introduction of Apple’s larger iPhone 6 Plus – a “phablet” similar in size to several of its own lines. At the lower end of the market it has been hit by competition from Chinese manufacturers.

Industry data shows Samsung sold more smartphones than any other producer during the third quarter, with 84.5m compared to Apple’s 48m iPhones. But Samsung’s models are cheaper.

It saw improvements for other parts of the company including a division which supplies processors powering Apple’s iPhones.

Samsung also said it secured deals with a number of smartphone makers to supply display panels known as OLED screens.

Elsewhere, Japanese rival Sony posted a quarterly operating profit of 88bn yen (£477m), boosted by strong Playstation 4 sales, compared to a loss of 85.6bn yen (£464m) last year when it booked an impairment  charge for its struggling mobiles business.

The video games division, together with image sensors used in smartphones and digital cameras, helped the company offset a fall in its own phones’ sales, helping to keep the company on a recovery track after years of decline in its consumer electronics business.

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