Samsung profits

Samsung reported higher than expected Q3 profits of 7.39T Korean won ($6.4 billion) on revenue of 51.68T won ($45.2 billion), achieving its predicted first return to profit growth in eight quarters. However, while the company reported increased sales of the Galaxy Note 5 and Galaxy S6 Edge+, this was only achieved by cutting the prices.

Samsung admits that smartphone growth will be slow compared to previous years, but Re/code notes that the company believes it can generate growth in two ways … 
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There’s good news and bad news for Samsung today. The good news: the company has forecast a reversal of its seven-quarter decline in profits, suggesting an impressive year-on-year hike of almost 80%.

The bad news is that, while the company itself hasn’t released any details on where the profit is coming from, analysts cited by the WSJ and elsewhere put it down to strong growth in sales of chips and displays – not phone sales. This suggests that Samsung is making its money by helping other manufacturers, like Apple, sell their phones … 
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Samsung, which recently froze the salaries of executives in response to falling profits, has confirmed to Reuters that it is now extending the salary freeze to all employees.

The cost-cutting move is the latest by Samsung Electronics, which in January reported its first annual profit decline since 2011, as it lost market share to Apple Inc’s new iPhones and cheaper Chinese rivals like Xiaomi.

The move comes a few days before Samsung is set to unveil its new flagship smartphone, the Galaxy S6. Korean business professor and author of Sony vs Samsung says that the salary freeze is likely to “inject a sense of crisis into employees” … 
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