Today we traveled to Korea South because in that country, the two leading manufacturers of smartphones are living very different situations in regards to revenue and profits relating to the last part of the year which has just finished.
Despite the bad publicity and the massive withdrawal of devices because of the explosions and fires from Galaxy Note 7, the truth is that Samsung seems to be demonstrating good health and expected profits for its fourth quarter of 2016 which is not bad. On the contrary, LG Electronics would be about to report its first loss quarterly over six years.
With 44,000 million in consolidated sales, Samsung is on track to report an operating profit of 7,600 billion dollars for the fourth quarter of 2016, which would be a record for the company, despite being referring to the key quarter in which the production of the Galaxy Note 7 was definitely suspended.
A year ago, profits for the fourth quarter amounted to 5,100 million dollars, i.e., 2,500 million dollars less than at present. Are surprised? Yes, we can not deny it. And it is that, I repeat, these figures are relating to the period in which Samsung started replace the Galaxy Note 7 due to battery problems making them explode; later, these replacement devices had to be removed, and their sales and production of the terminal were suspended forever.
At the same time, this situation coincided with the launches of the iPhone of Apple and the Google Pixel 7 However, many sellers ended up urging users to opt for the Galaxy S7 Edge as the device intended to replace the Note 7 Samsung star.
This Samsung, unexpected by many, success contrasts with its South Korean rival LG. By the end of 2016, the benefits of LG dropped more than 50% due basically to the 400 million dollars in losses in its mobile division. Although revenue increased 1.5% to 12,000 million dollars, a loss of 29 million dollars for the fourth quarter is expected.
It’s the greatest loss since the fourth quarter of 2010; analysts are blaming it the fall of sales of the mobile division as well as other products, including televisions.