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Samsung earned the equivalent of about $11.5 billion in operating profit last quarter on record $63.7 billion of revenue. For the full year, the company scored another revenue record of $232 billion and $43 billion in operating profit. That record flied on the wings of its semiconductors as has become customary in the last few years, yet the mobile business, now called Mobile eXperience (MX) notched a very good quarter, too.
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.
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.
