Samsung had a profitable year despite a drop in smartphone sales

Samsung had a profitable year despite a drop in smartphone sales

Samsung has released its consolidated financial results for the fourth quarter and the entire fiscal year for 2020. The company reported net annual revenue of KRW 236.81 trillion (~ $211.5 billion) and a profit of KRW 35.99 trillion (~ $32.1 billion). The annual profit rose by 26.4%, but on a quarterly basis, Samsung witnessed the net profits decline by 26.7%. As for the IT & Mobile Communications Division, Samsung recorded revenue of KRW 22.34 trillion (~ $20 billion) and had a profitable quarter. However, the company saw smartphone shipments decline.

Samsung expects to bounce back propelled by Galaxy S21 and expansion of its 5G portfolio

The South Korean electronics giant is expected to bounce back, riding on the new Galaxy S21 series flagships and other mass-market smartphones, alongside the debut of more premium products in 2021 across the foldable portfolio. Samsung also plans to boost the shipment figures by launching more 5G devices across all price brackets, and is also looking to strengthen its tablet and wearable device portfolio. The company is not overly enthusiastic about a quick return to pre-pandemic numbers, but expects profitable quarters ahead by tweaking the pricing structure and boosting the operational efficiency.

As per an IDC report, Samsung shipped a total of 73.9 million phones in Q4 2020, capturing 19.1% market share. On a yearly basis, Samsung’s net phone shipments stood at 266.7 million, helping it capture the number 1 spot by market share at 20.6 %, followed by Apple at the second spot with 206.1 million shipments in 2020. However, the net phone shipments dropped by 9.8% on a YoY basis for Samsung, while Apple grew by 7.9% in the same span of time.

Samsung took the top spot in 2020 with a net shipment figure of 266.7 million

“Looking ahead to the first quarter, market demand for smartphones and tablets is expected to decline QoQ amid weak seasonality. However, both revenue and profit for the Mobile Communications Business are expected to rise, driven by flagship model sales on the launch of the Galaxy S21 series and product mix improvement. Upcoming release of new mass-market products will also contribute to the growth in the first quarter,” Samsung mentioned in its press release.

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