Samsung Expects Q4 Profit Rise But Warns of Tough 2016

South Korean gadget maker Samsung Electronics says its operating profits are likely to have risen by 15% for the final quarter of 2015, compared with the year-earlier period.

The expected increase appears to have been fueled by sales of more profitable devices, with Samsung Electronics Co. Ltd. (Korea: SEC) also revealing that fourth-quarter revenues were probably the same as in 2014, at about 53 trillion Korean won (US$44.1 billion).

The world's biggest maker of smartphones expects to report an operating profit of KRW6.1 trillion ($5.1 billion) for the quarter.

Samsung faces growing competition at the lower end of the smartphone market from Chinese device makers such as Huawei Technologies Co. Ltd. and Xiaomi.

Earlier this week it warned investors that conditions would be tough this year given the slowdown in China's economy and weakness in a number of emerging markets.

In the market for more expensive handsets, meanwhile, the company is locked in a fierce battle with iPhone maker Apple Inc. (Nasdaq: AAPL).

Samsung is also a manufacturer of memory chips, TVs and network equipment, but the division responsible for making phones accounted for about 54% of revenues in 2014.

The company's guidance fell short of analyst expectations, according to a Reuters poll, but Samsung's shares closed up 0.8% in Seoul on Friday.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

kq4ym 1/24/2016 | 6:15:22 PM
Re: Phones With half of their business phones, I would wonder if Samsung is going to try to move profits into other areas of it's existing lines. Even a billion in profits can hurt big time if it's cut by a slowdown in demand for one product, espcially when the competition really heats up.
TV Monitor 1/11/2016 | 2:05:04 PM
Re: Phones Dan Jones

EU regulators are concerned that Europe is falling behind Asians in 5G development, and want Euro telcos to hurry up and accelerate 5G deployment.


January 11, 2016 6:12 pm
Brussels summons European telcos to 5G meeting

Chief executives from Europe's 10 largest telecoms groups have been summoned to a meeting by Brussels' digital commissioner to speed up and implement a strategy to deploy next generation 5G mobile services. ‎

Regulators are worried that Asian countries such as China, Japan and South Korea will lead the development of a technology that will become essential to digital services, according to people familiar with the thinking of the commission.

Countries such as China and South Korea are investing heavily in 5G development work, with the latter expecting to have a service ready for the 2018 Winter Olympic Games. Most telecoms companies do not expect to have a commercial form of 5G available until after 2020.
TV Monitor 1/10/2016 | 9:20:22 PM
Re: Phones Dan Jones

AT&T too is accepting Above 24 Ghz 5G.

"So no international 5G revenues for Samsung till the mid-2020s???"

Even if international 5G revenues doesn't start rolling in for Samsung until the mid-2020s, Samsung still wins, because Samsung's 5G base station product line up of 2025 would be third gen, while all the competitor's offerings would be first gen.

In other word, Samsung will most certainly be the Ericsson of 5G era in 5~10 years from now.
DanJones 1/10/2016 | 2:03:33 PM
Re: Phones Except that most operators around the world won't have 28Ghz spectrum available to them use in 2020. So Samsung might make domestic revenues but not global revenues. For instance, the 600MHz auction in the US is happening in 2016. Operators are expecting that to be available for use in 2021. There isn't a 28Ghz auction on the books in the US, so it won't be available to actually till 202something. So no international 5G revenues for Samsung till the mid-2020s???
TV Monitor 1/9/2016 | 12:34:57 PM
Re: Phones danielcawery

Things will reset for Samsung in around 2020, when 5G is deployed commercially and Samsung is the only vendor able to supply both base stations and phones in globally harmonized 28~40 Ghz 5G band, giving Samsung a huge leg up against others trying to catch up.
danielcawrey 1/8/2016 | 9:16:34 PM
Phones I did not realize that so much of Samsung's revenue now comes frome phones. I guess being such a large smartphone manufacturer has to do with that, but I think the company is going to face some serious competition in the smartphone market over the next few years. Not just from Apple, but from upstart that want to innovate and find ways to wring more profit out of the sector in creative ways. 
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