Samsung's mobile division has been able to ride out the pandemic in Q3 2020. As the world gradually opened up after restrictive lockdowns, Samsung's focused on providing products that helped customers make the most out of the new normal.
The company revealed in its full earnings release for Q3 2020 today that the mobile division's profits surged by 51% compared to the same period last year. It has also laid out its plans to sustain this momentum going into the new year.
More foldables and 5G phones coming next year
Samsung says that its smartphone sales rose sharply in the previous quarter due to the launch of the Galaxy Note 20 series and the Galaxy Z Fold 2. The company also saw the considerable success of mass-market models particularly in markets like India.
It also took many steps on the business side of things to improve profitability. This included more efficient cost management through component standardization and a reduction in marketing expenses. The third quarter of this year also saw an uptick in sales for tablets and wearables with Samsung offering new products like the Galaxy Tab S7, Galaxy Watch 3 and Galaxy Buds Live in these categories.
Samsung sees demand for its mobile products shrinking in Q4. That's largely because the effects of new product launches has now been diminished. There's increased competition as well and marketing spends tends to be traditionally higher in Q4 as well.
The company expects the mobile market to witness an increase in demand next year as economies across the globe recover from the effects of the pandemic. Its strategy to expand sales centers around further expanding its foldable phone lineup and launching more affordable, mass-market 5G smartphones.
It's first foldable smartphone of 2021 will likely be the Galaxy Z Flip 2. The Galaxy Z Fold will also get a successor next year. There has been some talk of a “Lite” Galaxy Z Fold but concrete evidence on that is yet to surface. The Galaxy A42 5G is already Samsung's cheapest 5G smartphone, we can expect the barrier of entry to be reduced further in 2021.
