The launch of Galaxy S21 smartphone series earlier this year has helped drive Samsung’s 44% increase in first quarter profits, according to analysts.
The Korean tech giant announced its earnings guidance for the first quarter of the 2021 fiscal year, saying it expects to see an operating income of 9.3 trillion won (£6 billion) for the three-month period, an increase of 44% compared to last year.
It also reported estimated sales of 65 trillion won (£42.2 billion) for the first quarter, an increase of 17.5% from the previous year.
According to analysts, the results were driven by the impressive performance of the Galaxy S21 and Galaxy S21 Ultra, which were first unveiled in mid-January – weeks earlier than its usual release date. The decision was likely taken due to attempts to capitalise on Huawei's dwindling market share following weak European sales.
Samsung wasn’t the only tech giant that adjusted its annual flagship launch following the global pandemic: the launch of Apple's iPhone 12 was delayed by a month, arrivingng in October 2021 rather than September.
However, the move proved to be a success, with the tech giant shipping 81.8 million handets between October and December, a 4% increase from the previous year and the most it has ever sold in a single quarter.
According to Ben Wood, chief analyst and CMO at CCS Insight: “Apple’s iPhone remains a fearsome competitor for all smartphone makers, but Samsung has provided strong differentiation with the S21, particularly the camera’s optical zoom capabilities which are a standout feature”.
Commenting on Samsung’s financial results, Wood told IT Pro that they “reflect Samsung’s broader success in both semiconductors and smartphones delivering strong year-on-year growth”.
“The S21 family has been well received and its punchy pricing, on average $200 less than comparable S20 models, has seen strong support from key channels. The phones have done well with key channels in the US and Europe, notably with mobile operators who have also worked closely with Samsung to offer attractive trade-in deals.
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"Samsung has also benefited from Huawei’s difficulties, consolidating the South Korean company’s position as the undisputed market leader for Android-powered smartphones,” he said.
According to Wood, Samsung managed to protect its business operations from component shortages better than its smartphone market competitors.
“It has been able to capitalise on this at the same time as launching its highly competitive S21 line of flagship devices, supported by an ever-growing range of more affordable A-series phones,” he told IT Pro.
Unveiled last month, the Samsung Galaxy A52, A52 5G, and A72 aim to “democratise” the Galaxy range by providing quality features - including a 64MP high-res camera lens and Super AMOLED display - at a lower price.
