Samsung defies the pandemic driven slowdown with quarterly profit up by 58 percent
One of the unusual features of the global viral pandemic has been the big bump in sales of electronics technology. With workers forced to work from home, the purchase of consumer electronics including smartphones, tablets and PCs has spiked despite the otherwise bleak global economy. The first signs of this came with Apple’s bumper fiscal third quarter result announced at the end of July when it announced profit of US11.25 billion. Now Samsung has joined it in announcing that it too has enjoyed better than expected sales by recording a profit of US$10.6 billion.
Among the key drivers of Samsung’s result were the sales of parts including SoC’s to embattled Chinese tech giant Huawei. Falling foul of the Trump Administration, Huawei has been banned from doing business with any companies that incorporate US-patented technologies and has been forced to stock up on parts. Also helping to drive Samsung’s 58 percent jump in profit (a two-year high) were the sales of its smartphones. In particular, its mid-range A-series smartphones have thrived during the past three months while its flagship devices like the Galaxy Note20 and Galaxy S20 have also fared well.
Despite beating analyst’s expectations, Samsung’s shares dipped slightly and were down 0.3 percent at the time of writing. Analysts are forecasting a decline in memory chip prices with the DRAM modules that Samsung makes expected to decrease in value by 10 percent. Further, Apple’s new iPhone 12 range launch could also cut into some of Samsung’s sales, although its new Galaxy S20 FE range could help offset this. Given the general state of the global economy, however, it looks like it remains a good time for companies like Samsung to be the consumer electronics market.