Early smartphone launch boosts Samsung profits

Samsung

While tech giant Apple reported sales drop in its flagship iPhone, the Korean smartphone maker  Samsung Electronics, reported a better-than-expected jump in net profits on Thursday, boosted by the successful early release of its new flagship Galaxy handset.

The result will encourage shareholders after a disappointing 2015 that saw Samsung lose more than $8.0 billion in market value, with its smartphone business sandwiched by top-end rivals like Apple’s iPhone and lower-end devices from fast-growing Chinese outfits like Huawei and Xiaomi.

In an effort to defend its smartphone share, Samsung rolled out the latest version of its Galaxy S7 smartphone in March — a month earlier than the previous year and ahead of new launches by its competitors.

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“The first quarter saw overall earnings growth led by the early launch and successful sales of the flagship Galaxy S7 and S7 edge,” the South Korean giant said in a regulatory filing.

Net income for the January-March period stood at 5.25 trillion won ($4.56 billion), up 14.1 percent from 4.63 trillion won in the same quarter last year.

The first quarter figure was higher than the 4.42-trillion-won average of estimates compiled by Bloomberg News.

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The strong Galaxy S7 performance came in the face of a flattening global smartphone market that saw arch-rival Apple on Tuesday report its first-ever drop in iPhone sales since launching the iconic handset.

Apple reported net income of $10.5 billion in the fiscal quarter to March 26, down from $13.6 billion last year.

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(With AFP inputs)

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