Galaxy Note and Fold Wings Boost IM Operating Profit to 4.4 Trillion Won... Q4 Expected to Decline

Achieved IM Quarterly Operating Profit of 4.45 Trillion KRW in 3 Years
Flagship Shipments Including Note and Fold2 Up 50% QoQ
"Expanding Sales Through Foldable Popularization, Flagship Differentiation, and Strengthening Mid-to-Low Price Segments"

Noh Tae-moon, President of Samsung Electronics' Wireless Business Division, is introducing the Galaxy Note20.

[Asia Economy Reporter Han Jinju] Samsung Electronics' flagship new products such as the Galaxy Note20 and Galaxy Z Fold2 have seen a surge in sales, pushing the IM division's operating profit beyond 4 trillion won for the first time in three years.

On the 29th, Samsung Electronics announced that the IM division's sales for the third quarter reached 30.49 trillion won, with an operating profit of 4.45 trillion won. Sales increased by 4.24% and operating profit rose by 52.40% compared to the same period last year.

Samsung Electronics IM Division Quarterly Performance

The sales volume of flagship models like the Galaxy Note20 and Galaxy Z Fold2 increased by 50% compared to the previous quarter, driving the third-quarter performance. Increased sales of tablets such as the Galaxy Tab S7 and wearable products like the Galaxy Watch3 and Galaxy Buds Live also contributed to profit growth. Smartphone shipments for the third quarter are estimated at 80 million units, and tablet shipments at 10 million units. In the network business, Samsung laid the foundation for 5G by signing an equipment supply contract with Verizon.

Samsung Electronics expects demand to expand with the global spread of 5G and is focusing on expanding its 5G smartphone lineup and accelerating the popularization of foldable devices. At the same time, in emerging markets such as Southeast Asia and India, it diversified its mid-to-low-end lineup portfolio to boost shipments. Thanks to the expansion of mid-to-low-end lineups including the Galaxy F41, tailored for India?the second largest market after China?and the Galaxy M01, Samsung reclaimed first place in the Indian smartphone market with a 24% share in the third quarter (according to Counterpoint), surpassing Xiaomi.

Kim Kyungmin, a researcher at Hana Financial Investment, explained, "Shipments increased mainly in mid-to-low-end models, improving profitability, and the increased volume led to higher profit margins compared to before. The expansion of online channel sales also contributed to profitability improvement."

In the fourth quarter, sales are expected to decline as the effect of new product launches fades. With the release of Apple's first 5G iPhone 12, defending market share in the second half has become urgent. Although smartphone demand is increasing, profitability is expected to decline due to intensified year-end market competition and increased marketing expenses. Strategy Analytics forecasts Samsung Electronics' annual smartphone shipments this year at 265 million units with a 21% market share, surpassing Apple (192 million units, 15.3%) and Huawei (190 million units, 15.1%).

Samsung Electronics stated, "We plan to expand smartphone sales by differentiating our flagship lineup through strengthening the product competitiveness and popularization of foldable smartphones, while also enhancing the mid-to-low-end 5G smartphone lineup. We will continuously pursue product mix improvement and operational efficiency."

This content was produced with the assistance of AI translation services.