Samsung powers ahead with 5G phones
SEOUL: Strong sales of Samsung Electronics’ Galaxy Note 10 smartphone series are limiting forecast profit falls at the South Korean tech giant, raising hopes it is getting back on a growth track after years of moribund sales.
Samsung, the world’s largest smartphone maker, is powering ahead with the launch of 5G phones and US$2,000 foldable handsets as it heats up competition with rivals Apple of the United States and China’s Huawei following a battery explosion scandal in 2017 that hurt sales.
Analysts said the strategy may be paying off as the company yesterday flagged a smaller-than-expected fall in third quarter operating profit, saying at the same time that sales of the Note 10 both at home and in Europe had been strong since the Aug 23 launch.
There are also early signs that the global memory chip business, a key driver of Samsung’s profit, will stabilise next year after prices were eroded by a weak global economy and slower spending by key data centre customers.
“With its foldable smartphone that no other competitors have yet launched, Samsung will likely lead the high-end smartphone market as it would mass produce foldable smartphones next year,” said Song Myung-sup, an analyst at HI Investment & Securities.
“Also, a growing number of data centre customers are ordering more memory chips... possibly slowing down the drop in prices,” Song added.
Samsung said it has sold more than one million of the 5G Note 10 handsets in South Korea, making it the company’s fastest selling flagship model at home, and sales in Europe were also strong.
Analysts credit Samsung with receiving a boost from US sanctions on Huawei that effectively bar US firms from supplying the Chinese competitor.
Some analysts are more cautious about the outlook for the global memory chip business, which remains clouded by Us-china trade conflict and provides two thirds of Samsung’s profit.