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Mobile Component Demand Returns Samsung To Profit Growth

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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Fears about Samsung’s mobile growth persist, but memory, display and processor demand means it’s back on track

Samsung’s operating profit grew for the first time in two years during the third quarter of 2013 as strong demand for its components offset fears about its smartphone business.

Operating profit grew year on year from 4.06 trillion won to 7.39 trillion won, with its ‘device solutions’ unit doubling its contribution from 2.33 trillion won to 4.65 trillion won. Of this figure, 3.66 trillion came from semiconductors and 0.93 trillion won resulted from display panel sales.

Mobile profit also rose from 1.75 trillion won to 2.4 trillion won – a jump attributed by Samsung to new models like the Samsung S6 edge+ entering the market.

Samsung results

Samsung Galaxy S6 Edge+ (6)The Korean manufacturer is the world’s largest smartphone manufacturer in the world but strong competition at the high end of the market from the likes of Apple along with a growing number of mid-range manufacturers such as Xiaomi have impacted the firm’s business.

There have also been concerns of smartphone saturation in developed markets, causing Samsung to target the business market in order to maintain growth. In July, the company warned of disappointing sales, partly because it underestimated demand for the Samsung Galaxy S6 edge.

However given the growth of the overall smartphone market, Samsung stands to benefit as other companies purchase memory, processors and other components.

According to recent figures from IDC, Samsung shipped 84.5 million devices during the past quarter, giving it a 23.8 share of the smartphone market. Overall shipments were static, with analysts noting the strong competition in the market and slowing growth in the high end sector.

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