On Friday, in an earnings guidance release, the South Korea-based smartphone maker forecasted sharply increased revenue and record profit. The Korean company is expecting its operating profit to ramp up around 72% to $12.1 billion and its revenue to hike over 18% to over $52 billion.
Revenue of Samsung coming from its rival
The results of the South Korea-based smartphone maker show a sharp increase in revenue and it looks like that growth is coming because of its rival – the Silicon Valley giant “Apple Inc.” In an interview to Reuters, analysts said that “it’s coming from Samsung’s top smartphone rival.”
The South-Korea based smartphone company – Samsung Electronics – is best known as a brand that is selling phones like the Samsung Galaxy S8. However, the most profitable division of Samsung is selling parts like memory chips and screens to companies like the tech giant “Apple.”
The South Korean company is, in fact, the only supplier of the new next-generation OLED screen, which will be a good selling point of the iPhone 8, according to reports by news site Business Insider. The analysts of Wall Street expect the iPhone 8 of the Silicon Valley giant to do a brilliant job is sales this year with its upcoming iPhone 8 that comes with a new design. In addition to all this, the tech giant has a huge backlog of loyal consumers who will buy the upcoming phone, no matter what the features are or cost of the device is.
Apple may have started taking shipments from its suppliers, here’s why
The tech giant is planning to release the iPhone in September and if it does that then it is probably already taking the shipments of parts from its suppliers, including the Korean smartphone maker Samsung. In a note, Drexel Hamilton analyst Brian White wrote that “Final June sales for our Apple Monitor rose by 18% month-over-month and well above the average decline of 2% over the past twelve years. This compares to the five year average decrease of 7% and a 2% increase in June 2016.” Mr. Brian White was considering the suppliers of the tech giant, who he calls the “Apple Monitor.”
He continued, saying “We believe the initial ramp of certain components for the new iPhones this fall, combined with recently launched Macs and iPad Pros, contributed to this performance.” The operating profit of the smartphone maker may even top the profit of the tech giant for the first time this quarter.
According to estimations of the analysts, the operating profit of the tech giant this quarter is at $10.52 billion, says the Bloomberg data. Hence, even though the vice-chairman of Samsung – Lee Jay-young – is on trial for his role in an alleged corruption scheme, the South Korean giant is continuing to deliver huge results. At the end of this month, the Korean company will be announcing its actual earnings. The earnings report of the smartphone maker is scheduled for August 1.