Buoyed by the holiday sales success of its foldable Fold and Flip phone lines, as well as the Galaxy S series, Samsung notched $24 billion in consolidated revenue and $2.2 billion in operating profit from its mobile and network divisions. The launch of the Galaxy S22 models next month could only strengthen that trend in the first quarter of the year, too.
On record $63.7 billion in revenue, Samsung generated the equivalent of roughly $11.5 billion in operating profit last quarter. The corporation set a new revenue record of $232 billion for the full year, with an operating profit of $43 billion. That record was set on the backs of its chips, as has become common in recent years, but the mobile division, now known as Mobile eXperience (MX), had a strong quarter as well.
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While that kind of operating profit is still a far cry from Apple’s billions that come directly from iPhone sales, it’s also a testament for Samsung’s foldable phones strategy success and market acceptance, despite that spending on ads to popularize the nascent category weighed on the profit margins:
Despite the component supply shortage, the MX Business saw a slight revenue growth quarter-on-quarter driven by sales increase in premium smartphones including foldable lineup and Galaxy S series. Device Ecosystem products such as PCs, tablets and wearables have also contributed to the revenue growth. Meanwhile, increased marketing expenses to boost foldable category sales and prepare for the launch of new models in Q1 2022 had impact on profitability to some degree.
Looking ahead to the first quarter, demand for smartphones and tablets is forecast to decline quarter-on-quarter amid weak seasonality as well as uncertainties over component supply. However, the MX Business aims to secure solid profitability by expanding flagship sales such as Galaxy S21 FE and upcoming release of a new Galaxy S series. Also, Samsung will proactively target replacement demand with competitive mass-market 5G lineup and growth opportunities in the market while continuing to increase sales of Device Ecosystem products such as PCs, tablets and wearables.
As far as 2022 is concerned, Samsung sounds pretty optimistic about its device roadmap going forward, expecting to “solidify its leadership in the flagship market by accelerating innovations and differentiated experiences such as Galaxy S and foldable series.” The company also plans to work on increasing the “competitiveness of mass-market 5G lineup,” which could only mean that we’ll see more features added to midrange and even budget 5G phones going forward.
Samsung also expects “new smartphones by its major customers and a growing customer base in the foldable display” to boost its mobile screen panels business in Q1 which could only mean that there will be more foldable phones with Samsung-made displays will be coming our way very soon. Last but not least the part-making business of Samsung that develops phone components “hopes to see its performance grow further by maximizing supply of 5G SoCs for the volume zone and 108- and 200-megapixel sensors” this year. Yay, cheaper 5G phones and handsets with record 200MP resolution cameras seem to be on tap for 2022 and both get us excited each in its own way.
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