Galaxy Phone Soars with Operating Profit of 4.39 Trillion Won... Samsung's Surprise Earnings Top Contributor

[Image source=Yonhap News]

[Asia Economy Reporter Seulgina Cho] The Galaxy S21 led the way while the Galaxy A series pushed forward. Samsung Electronics, which recorded an earnings surprise in the first quarter, secured an operating profit of a whopping 4.39 trillion KRW in the IM division, which is responsible for smartphones and tablets. This accounts for nearly half of the total operating profit (9.38 trillion KRW).

According to Samsung Electronics on the 29th, the IM division's sales in the first quarter reached 29.21 trillion KRW, with an operating profit of 4.39 trillion KRW. This represents an increase of 12.3% and 65.7%, respectively, compared to the same period last year, which was severely impacted by COVID-19. Compared to the previous quarter, the IM division's sales rose by 30.8%, and operating profit increased by 81.4%.

In particular, smartphones including the Galaxy S21 are credited as the main drivers behind Samsung Electronics' first-quarter performance. The early launch of the Galaxy S21, which implemented an aggressive pricing strategy amid the COVID-19 pent-up demand phenomenon, is seen as a successful move. The two-track strategy with the mid-range Galaxy A series is also analyzed to have contributed to the improved performance.

Additionally, the Galaxy ecosystem (Device Eco) products such as tablets, PCs, and wearables, which have enhanced connectivity between devices, also showed growth. Samsung Electronics reaffirmed its plan to expand the DNA of the world’s number one smartphone to laptops and other devices by holding its first-ever laptop Unpacked event the previous night.

The mobile market in the second quarter is expected to be sluggish compared to the previous quarter due to the off-season and parts supply issues. In particular, the effect of flagship new products is expected to slow down, and the recent semiconductor shortage is anticipated to be fully reflected in the performance. However, it is forecasted that annual demand will recover to pre-COVID-19 levels in the second half of the year as the economy fully recovers and 5G spreads.

Samsung Electronics plans to minimize the impact of parts supply and secure profitability. In the wireless division, it will popularize the foldable category such as the Galaxy Z Fold to strengthen leadership in the premium market, while firmly establishing market share in the mid-range segment by launching new A series models like the Galaxy A72 and A52. It will also release tablets and wearable products including the Galaxy Book series. The network business will continue to expand 5G domestically and grow operations in North America and South Asia.

Samsung Electronics stated, "We will strive to achieve solid profits by popularizing foldables, maximizing sales of competitive mid-range 5G new models, and promoting growth in the tablet, PC, and wearable businesses. We also plan to continuously strengthen the Galaxy ecosystem through cooperation with global partners as well as our own services."

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