Samsung cited the “early launch and successful sales” of its Galaxy S7 line as it reported growth in Q1 profit.
The company said the device’s success was demonstrated by “robust sell-out figures and low inventory levels compared to predecessors”.
For its mobile activities, the company also noted improved cost efficiency through its “streamlined” mid-to-low end smartphone lines. It had a one-time royalty settlement expense in the quarter.
The company shipped 92 million handsets during the quarter, with smartphones making up “mid-80s per cent” of the mix. Some six million tablets were also shifted.
In its IT & Mobile Communications unit, in which its handset business resides, operating profit of KRW3.89 trillion ($3.41 billion) was up 42 per cent year-on-year, on revenue of KRW27.60 trillion, up 7 per cent.
Mobile makes up 98 per cent of sales in this unit.
Samsung was also bullish looking forward, despite flat demand for smartphones and tablets in the second quarter.
While total shipments are expected to be “slightly lower”, the company is expecting blended average selling prices to improve, as smartphones make up a larger portion of the mix.
It said it expects sales of flagship products to increase year-on-year, especially with strong demand for flagships such as Galaxy S7 as its rollout continues, and with new launches planned for the second half.
Samsung traditionally announces larger-screen devices in its Note line in the August/September timeframe, possibly accompanied this time by a larger Galaxy S7 sibling.
An increase in shipments of mid-to-low end Galaxy A and J series devices are also expected to help sales momentum.
It will also “continue to manage cost efficiencies by streamlining its smartphone line-ups”.
But its view for the tablet market was somewhat bleak, with “negative growth” in the market for the full year.
On a group level, Samsung reported a profit of KRW5.25 trillion, up 13.4 per cent year-on-year, on revenue of KRW49.78 trillion, up 5.6 per cent.
In addition to the strength of the Galaxy S7 line, the company also noted an improved memory product mix, expanded 14nm supply of System LSI chips, and increased sales of OLED panels (driven by Galaxy S7 demand).
The company’s Consumer Electronics divisio saw “significant” earning growth led by expanded sales of premium (SUHD and curved) televisions and a “notable” increase in its premium home appliance products in North America. MobileWorldLive
