Samsung's Q3 profits expected to hit record levels, but smartphone numbers will continue to drop

Samsung's Q3 profits expected to hit record levels, but smartphone numbers will continue to drop
Samsung is not due to report final financial results for the July - September 2018 quarter for a few more weeks, but it’s pretty obvious that the company is headed for yet another record-breaking profit score.

The world’s largest smartphone vendor continues to rely heavily on its semiconductor business, projected to account for almost 80 percent of the 17.2 trillion won overall Q3 operating profit.

That currently equates to around $15.3 billion, but analysts expect quarterly profits to start shrinking soon, as prices of various types of extremely lucrative chips for Samsung are slowly dropping.

The chaebol is probably looking at decent Q4 numbers, followed by “minimal” profit growth during the first half of next year, and “small” profit declines in the second half of 2019.

Samsung’s once-thriving mobile division will unsurprisingly not be able to offset the dwindling profit scores of the chipmaking department, as the global smartphone market continues to “mature” (read stagnate).

For the third quarter in a row, Samsung’s smartphones are forecasted to see drops in operating profit between July and September, with divisional earnings “pressured” by Galaxy Note 9 marketing costs.

Unfortunately, we’ll have to wait for a more detailed analysis of the latest flagship’s success, as well as Samsung’s Galaxy S10 expectations. Until then, you might be interested to hear the company’s display unit is looking at around 812 billion won ($730 million) in Q3 2018 operating profit, benefitting from a rebound in prices for “large displays”, as well as increased orders for OLED panels after Apple’s recent launch of next-gen iPhones.

That 812 billion won score represents a sharp increase from Q2’s modest 140 billion won profit, but also a decrease from the 970 billion won earned between July and September 2017. Competition is about to heat up too, so Samsung had better not rest on its laurels.

source: Reuters

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30 Comments

1. ijuanp03

Posts: 445; Member since: Dec 30, 2014

That's great. At least they don't rely their business on smartphones alone. I'm wondering what will happen to the fruit company if it can't sell its phones anymore. Don't say it will never happen. Look at where Nokia is now.

4. perry1234

Posts: 619; Member since: Aug 14, 2012

With the cash pile that they have accumulated...and the kind of loyal fanbase they have, I don't think Nokia ever had that (fanbase not equal to LOYAL fanbase). People bought Nokia because it was tough and hardware was good. Also, software had more features than the competition. That's all. It was simple back in the day. Not anymore. With the advent to App store many people are deeply entrenched in the iOS ecosystem. For example , after jumping from several apps I finally use GoodNotes for all my notes (I am a working professional learning new skills btw). I have tried few note taking apps on Android but none come close to the writing experience of my iPad Pro 10.5 and the mentioned app. Also, it wirelessly takes a backup to iCloud where my notes are encrypted and saved. So whatever I write on my iPad is available to me at ALL TIMES (yeah even offline once sync is complete) on my iPhone 6S Plus. Believe me , I want to buy a flagship Android as a daily driver. But such kind of integration is rare on the Android end. Sometimes this kind of ability is much much more important that any single app/feature. I know Apple is ripping users off in some ways, I know they don't even have a 3.5mm dongle in the box, I know that their $750 phone does not even have a FullHD display, but , really , alternatives for people like me are half-baked as of now. I can do other things like picking a call on my iPad. Photos are synced across both devices and pics on iPad Pro fill up the screen completely and look marvelous, detail wise. For these reasons, their numbers may drop. Maybe they don't sell enough phones anymore (very unlikely though, 216 million iPhones sold in 2017 alone) , but it will take somethin catastrophic for them to fall like Nokia. Nokia was just stubborn to use Android. Not Apple.

18. meanestgenius

Posts: 21150; Member since: May 28, 2014

Actually, Nokia did have a fanbase equal to or even greater than Samsungs, at one point. They were once larger than their nearest 3 competitors combined, and that included Samsung. That was due in part for their extremely loyal fanbase. Their fanbase was so loyal they refused to switch to Android or any other OS at one point, even though the Nokia's Symbian was beginning to show its age. Their fanbase was cult-like, a lot like Apples is now. It was only when the majority of the fanbase felt betrayed by Nokia (Elop) when they switched to Windows Phone and killed anything that was deemed a threat to fans switching to Windows Phone (MeeGo) that the fans left by the aircraft carrier loads (forget mere boatloads). However, you can see that there is still a small part of that solid, loyal fanbase left, as HMD has made it to the top 10 global smartphone manufacturers list in the two years that its been around, and they are slowly but steadily growing. The fanbase is slowly coming back. But I agree, they were wrong to not go tne Android route sooner (They had a billion reasons to go to Windows Phone, thanks to Elop and Microsoft, which proved to be detrimental).

24. perry1234

Posts: 619; Member since: Aug 14, 2012

Oh ! Ok , I guess I never encountered such fans here or on any tech site....but yeah I guess your point makes sense. Switching to WP from feature rich Symbian definitely didn't go down well. MeeGo (N9) had shown some promise too...it was fluid and very gesture intuitive as per what YouTube videos I saw. HMD winning on nostalgia (also good devices) is proof that there is a loyal fanbase. Because, only good devices could not have propelled them to the top 10. Valid point. Anyhow, I don't think Apple is shutting shop anytime in the next decade. I totally forgot that their smartwatch, tablets and other accessories are doing great sales wise too !

27. meanestgenius

Posts: 21150; Member since: May 28, 2014

Oh. Apple isn't going Anywhere anytime soon. They have been smart enough to recognize that smartphone hardware isn't going to carry them indefinitely, and have been pushing hard at diversification through the Apple Watch and their services.

17. midan

Posts: 2470; Member since: Oct 09, 2017

Everything what Apple does print money, they don't only rely their business on smartphone. Sure it's biggest, but their smartwatch business does propably more money than everyone else smartphone business except Samsung and maybe Huaweii. Also something very big have to happen if Apple can't sell their phones anymore. We would need new "iPhone" which changes the whole industry. And even if that happens Apple have all the money and skills to follow new trends. So i wouldn't worry about Apple.

20. sleepypandaeyes

Posts: 332; Member since: Apr 12, 2015

Apple will always shift tons of iPhones, there's no other ios vendor and never will be.

2. Consumer2

Posts: 161; Member since: Jul 24, 2018

Fools In Samsung wake up. Your only Problem in your phones its the battery, low memory and they are overpriced. Do you have brain in your head, or s**t?

5. perry1234

Posts: 619; Member since: Aug 14, 2012

Wake up Samsung officials ? From PhoneArena's comment section ? From a random comment with no backup or analysis ? Give me the number of your pot dealer !!

7. Consumer2

Posts: 161; Member since: Jul 24, 2018

If you want to give you something, the only thing I have is my personal tool, that is 12-inch long and hard. So take this put it in your ass and anal-lyse it.

12. Leo_MC

Posts: 6091; Member since: Dec 02, 2011

So you're gay and you have a gay friend that approves?

25. perry1234

Posts: 619; Member since: Aug 14, 2012

Hard ? In the Phonearena's comment section ? Man, either you have no control over your tool or I pity you when you try to pee. I hope you don't use public restrooms. Anyway I guess your tool is 12 inches long at probably 2000:9 aspect ratio (techies would get the point of aspect ratio :)). Too bad you hate Samsung , you could write to them to make a slot for you C-Pen. Perhaps you could tap on it and click selfies too.

26. zelas

Posts: 41; Member since: Sep 25, 2013

This guy should be banned, Its annoying...seems like mentally challenged to me.

28. perry1234

Posts: 619; Member since: Aug 14, 2012

Yeah, definitely! looks like he cannot take a simple joke. Thanks for the support !

29. meanestgenius

Posts: 21150; Member since: May 28, 2014

LMAO LMAO LMAO!! Gottdam, that was FUNNY! You have the best cmment here by far!

30. perry1234

Posts: 619; Member since: Aug 14, 2012

Hehe thanks , trollers these days...this guy especially makes only nonsensical comments. Wonder why he is not banned yet. Not 1 comment which was good

19. sissy246

Posts: 6884; Member since: Mar 04, 2015

You obviously don't have one in your head. All flagship phones are overpriced, the batteries last just as long as any phone and memory just fine.

3. Consumer2

Posts: 161; Member since: Jul 24, 2018

The only feature consumers want, it's The feuture of A9 pro with 5000mHa battery, big memory and affordable price. Wake up Bozos , or you will continue to give free your smartphones in the villages with the name Appel, and next year Apple will do the same, because people, does not give money, anymore for brand names, but only for feautures.

6. Consumer2

Posts: 161; Member since: Jul 24, 2018

Samsung all the time, put new useless things in her smartphones ( lots of cameras and others...) and the important features ( Battery, memory and affordable price are the same from 2010)

22. TechNeck

Posts: 621; Member since: Aug 29, 2014

Samsung was one of the last brands to implement dual cameras in their phones. What nonsense are you even spouting out right now?

8. MarvzIsFallen

Posts: 646; Member since: Aug 11, 2017

This is sad. Samsung mobile is not earning anymore. Lucky they have semiconductors. They sell millions of displays to apple. But when apple start sourcing oled to LG, then it would hurt Samsung so bad. Their flagships are flop even with too much marketing on it. They really can’t compete with apple. Their competition is the other android OEMs. They will be shake when Huawei take over them in selling garbages.

9. iushnt

Posts: 3035; Member since: Feb 06, 2013

Lol, it was full of hatred rather than information.

10. iushnt

Posts: 3035; Member since: Feb 06, 2013

Lol, it was full of hatred rather than information.

11. iushnt

Posts: 3035; Member since: Feb 06, 2013

Lol, it was full of hatred rather than information.

13. almostdone

Posts: 416; Member since: Sep 25, 2012

Just search before taking iPhoneArena slanted views. Most of Samsung's profit are from their chips and not oled orders from Apple which is small in the grand scheme.

14. MarvzIsFallen

Posts: 646; Member since: Aug 11, 2017

Then it means their mobile phones sucks! Garbage! Trash! No wonder why their ASP is $200

15. MarvzIsFallen

Posts: 646; Member since: Aug 11, 2017

Then it means their mobile phones sucks! Garbage! Trash! No wonder why their ASP is $200

21. sissy246

Posts: 6884; Member since: Mar 04, 2015

I feel so bad for your parents to have a son or daughter like you. We all get it, you don't like Samsung, good for you.

16. I_have_boxes

Posts: 69; Member since: Jun 02, 2018

I saw Samsung Q3 and thought they were releasing yet another line of smartphone lol.

23. gamehead unregistered

When you barely make any changes to your phone can you be surprised?

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