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Samsung faces declining profit in Q4
29.10.2021 [06:58],
Alexey Razin

Last quarter, Samsung Electronics faced a 59% increase in operating income to $ 10.89 billion, in line with analyst expectations. The increased demand for smartphones contributed to this – sales volumes increased by about 50%, the older models sold especially well. Samsung does not expect good results from the fourth quarter.

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First of all, the decline in profits in the current quarter will be driven by reduced demand for memory from server clients, as well as increased competition in the segment of mobile phones and consumer electronics, as noted in a statement from Samsung. Memory prices will also decrease, so in monetary terms, the core business will suffer in the fourth quarter. Unlike the server segment, memory for smartphones, personal computers and graphics cards will be in high demand in the fourth quarter.

The brand’s smartphone sales should also decline in the fourth quarter, but the supply of displays for Apple products will allow Samsung to offset this trend in one way or another. The next year, according to representatives of the Korean company, will bring revival to the world market of smartphones and memory chips, but the pandemic factor so far adds some uncertainty, as does the tension between the United States and China.

In the third quarter, Samsung managed to increase profit from chip sales by 82%, as the company managed to take part of Huawei’s market positions in the smartphone segment, and the Chinese company itself continued to increase its stock of components along the way. Samsung Electronics revenue grew by 8% to $ 59 billion. In the fourth quarter, the company may face a decrease in shipments of smartphones by 5%, according to analysts. Competition from Apple will intensify, and the Korean giant itself will not be able to offer new models of smartphones at this moment. Samsung will have to increase advertising costs in the face of increasing competition.

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