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Samsung Posted Higher Operating Profit Than Apple for Q2, but Its Chip Business Was the Company’s Actual Savior

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Aug 2, 2018
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Despite lukewarm sales, Samsung managed to breeze past Apple in terms of profitability and the company has its chip division to thank for that. The latest Industry data has revealed that Samsung posted sales of $52.1 billion, but if you look carefully, the difference between the operating profits of both tech giants is nothing too extraordinary.

Samsung Generated $13.1 Billion Operating Profit for Q2 2018, Apple Reported $12.6 Billion Operating Profit for the Same Period

Apple made sales of $53.2 billion in the second quarter of 2018 and reported an operating profit of $12.6 billion, and if you’ve been following the industry for a long period, you’ll know that the California-based giant’s bread and butter come from iPhone sales. Samsung trailed behind Apple by more than 10 percent in terms of profit margin in the second half of 2016.

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According to IDC, Samsung shipped 71.5 million shipments for the second quarter of this year, becoming the biggest smartphone brand for this quarter. However, considering the Korean manufacturer does not make as much money as Apple does on iPhone sales, the remainder of that profit is going to be contributed thanks to AMOLED screens, DRAM chips, flash memory and semiconductor sales.

On the basis of this trend and its unrivalled dominance in several businesses, industry analysts expect Samsung to have a lead on Apple in terms of margin for the entire year. During the Apple Q2 2018 earnings, the company’s forecast for Q3 2018 is sales of $62 billion and an operating profit of $15.8 billion. Samsung is once again expected to beat Apple in the operating profit category but by a difference of a hairline. for Q3 2018 which means a ratio of 25 percent. Korean analysts expect the ratio to be 26 percent for Samsung in the same period.

The company is going to be announcing the Galaxy Note 9 next week, but since it does not feature a massive design change compared to the Galaxy S9 Plus, not to mention that it will be sporting the same camera as the latter, sufficient sales of the phablet are not to be expected.

Will Samsung be able to generate a higher operating profit compared to this figure with the release of the Galaxy S10 and Galaxy S10 Plus? Tell us down in the comments.

Source: The Korea Herald

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