Samsung Set To Flog More Premium Products As Profits Surge
Samsung Electronics has reported a massive surge in first-quarter profits however they have warned that the Russian Ukraine war surging inflation and Covid outbreaks that have led to lockdowns in China is a major problem for the South Korean business.
The Companies net income increased more than 50% US$8.8 billion in the three months ended March with strong sales of memory chips and premium smartphones.
The Samsung owned Harman business delivered $2.67 billion in revenue down 7% for the quarter. Year to date the business is up 13%.
As for TV sales Samsung said that the market contracted due to seasonality and the effect of last year’s pent up demand due for TV’s.
The business has maintained revenue growth momentum due to increased sales of premium products such as their NeoQLD TV’s.
The business is also looking to growth from their BESPOKE range of products that have not been launched in Australia.
Neo QLED 8K/Lifestyle products have been hit by high manufacturing costs, high material costs and global logistics.
The Company has moved to increase sales of premium Samsung products by increasing their manufacturing capabilities around the world.
Samsung is considered a bellwether for the tech industry since it’s the largest producer of memory chips for customers like Apple, as well as being the biggest smartphone maker in the world.
“It is an immense challenge to predict the duration or market ripple effects of various macro issues such as the Russian-Ukraine war and global inflation,” said Jinman Han, executive vice president for the memory chip business.
Samsung declined to make a financial forecast for the year because of the many uncertainties. Its shares fell nearly 1% in trading this morning in Seoul.
“A surge in raw materials prices caused by the Russia-Ukraine war” is hitting the smartphone industry, Han said.
“The consumer sentiment has potential to recover later in the quarter, with the launch of new form factor models, with people spending more time outside following gradual reopening in some countries, with the resumption of investment in 5G infrastructure.”
Global smartphone shipments declined 11% in the first quarter, the worst drop since the virus broke out, Canalys data showed. Samsung projected smartphone demand would rise in the second half of the year after a slight decline in the current quarter.
Bloomberg said that while Samsung’s pledge to actively pursue mergers and acquisitions has stalled, there’s rising expectations that Vice Chairman Jay Y. Lee — out from prison on parole — may get back to the office within this year.
South Korea’s major business lobby groups sent a joint letter urging President Moon Jae-in to pardon Lee, citing rising risks in the global business environment, according to Yonhap News. The move comes as U.S. President Joe Biden is planning to visit Samsung’s most advanced chip plant in Pyeongtaek during his trip to South Korea in late May.