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Samsung Set To Announce Monster Profit, Guess Where A Chunk Of It Comes From?

Weeks after rolling out their new Note 8 Samsung is set to reveal a massive $14.3 Billion dollar profit with a huge chunk of it set to come from flogging components to Apple for their new iPhone.

According to estimates Samsung will have revenues of 58.79 trillion Korean won, that will exceed Apple according to Reuters data. In the same period, Apple is expected to report revenue of $44.9 billion and an operating profit of $10.49 billion.

If the estimates are correct, Samsung’s operating profit would represent a 63 percent year-on-year increase.

This would also be the first time that Samsung has recorded higher quarterly operating profit than Apple.

Some analysts are even more bullish with Jeff Kim of KB Securities suggesting in a note this week that operating profit would reach 13.4 trillion Korean won.

It’s also been revealed that Samsung’s processor business is set to surpass that of Intel who are struggling to hold onto share and have failed to penetrate the processor market for smartphones.

While Samsung has traditionally been known for its strength in the smartphone market, it’s semiconductor business is booming as the company has been trying to reduce its reliance on mobile and build up in other areas.

Neil Campling, head of technology, media, and telecoms research at Northern Trust Capital Markets, said that semiconductors are likely to contribute 60 percent of the company’s operating profit in the second quarter, making it the largest division.

Earlier this week, Samsung announced plans to invest $18 billion in South Korea in its chip business, to boost its lead in the market.

With margins on consumer electronics nearing razor-thin levels, Samsung is now pivoting towards the IoT, artificial intelligence (AI) and automotive markets, which are also driving the company’s bottom-line growth.

But while high-memory chipsets and flexible OLED display panels for the smartphone market are currently the bread and butter of the company’s financial performance, Samsung isn’t ignoring the consumer device market.

An emphasis on IoT products, such as smart appliances and smart TVs, dovetails efficiently with the company’s vision of a connected future. Samsung is looking to expand that vision to an AI-based open ecosystem to unite its product portfolio.

The Korean Company claims thsat their digital voice assistant, Bixby, is expanding the capabilities of its consumer product lines, including TVs and major appliances, to be controlled by its new flagship phone, the Galaxy Note8.

Furthering its reach, Samsung last year acquired Harman to gain entry into the automotive market and earlier this month announced a $300 million initiative that will invest in technologies toward the development of autonomous and connected vehicles.

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