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Breaking Down Samsung's Q3 Results

Editorial by Luke Jones on Thursday October 29, 2015.

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Samsung is continuing its expansion back to growth with another solid quarterly period. The company announced its third quarter results in which Samsung Electronics increased both revenue and profit year on year. Throughout 2015 the Korean giant has been trying to get back to growth after a poor 2014 dogged by a loss of market share and a decline in sales.

A new smartphone strategy is seemingly paying off, with fewer handsets Samsung is not so bloated and the quality of its devices seems higher, mainly thanks to the inclusion of metal and other premium build materials. So, there are good signs for Samsung looking in from the outside, but the company says that the growth from Q3 may be short lived and worse, its smartphone division will see declined sales throughout 2016.

Total revenue topped at $45.6 billion over the three month period, a 6% growth. Samsung says its semi-conductor and screen business was the driver behind that growth, and not its smartphone division. Still, profit rose to $6.42 billion for the period ending September 30th, meeting both Samsung's and analyst predictions and expectations.

Samsung's forecast that smartphone sales will continue to decline over the next 12 months may have fans of the company worried; how can they brag about that to Apple rivals? Well, while sale declines are never good, they are not necessarily bad for Samsung either.

That may seem an odd statement, but the company significantly streamlined its product output in 2015. The Korean giant released 62 handsets in 2014 and has reduced that to 38 handsets so far through this year, meaning it is not throwing as much money away on devices that don?t sell. Expect Samsung to focus even more on two areas of the market, the high end and the budget, almost ignoring everything else in between during 2016.

Slowly the company is hoping to raise its margins and in an ultra-competitive market Samsung's frankly unprecedented dominance of two years ago was always going to decline. The fact that the company still sells twice as many smartphones as its nearest rival (Apple) suggests that a streamlined handset vision with higher margin for profit could deliver revenue even if sales take a slight overall hit.

Simply put, not company can sell tens of millions of units from a couple of handsets like Apple does, so Samsung covering bases is certainly not a bad strategy and worked wonders in the past. The company is now realizing that it does not have to cover those bases with so many products, especially in an ultra-competitive marketplace.

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About the author

Luke Jones
Luke Jones is the Managing Editor at MobileBurn.com and is the person you need to speak to about the content on the site. Luke studied creative writing at degree level before carving out a reputation as a freelance tech writer. He settled here at MobileBurn, where he reviews devices and contributes to the news, as well as overseeing the site's content and direction.

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