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Apple rival Samsung expects record third quarter profit, boosted by chip demand

Samsung is the world’s top maker of smarthphones with a 20.9% share of the market while Apple now sits in third place with a 12.1% of the market, according to IDC

Earnings are forecast to rise 20.3% and sales are expected to increase 4.8%

Apple Inc’s (NASDAQ:APPL) biggest smartphone competitor Samsung Electronics Co Ltd expects to post record quarterly profit, boosted by strong demand for its memory chips.

The South Korean electronics company has forecast operating profits of about 17.5trn won in the third quarter to September, up 20.3% from a year ago and above analysts’ estimates.

READ: Apple and Samsung finally agreesettlement in lengthy legal battle over iPhone patent infringements

That would mark an acceleration on the 6% increase in operating profit reported in the second quarter when its Galaxy S9 smartphone fell short of sales targets amid tough competition from cheaper Chinese-made phones.

The company, which is the world’s leading smartphones and memory chips maker, expects consolidated sales will rise 4.8% year-on-year to 65trn won, thanks to demand for its memory chips in mobile devices. However, falling prices for some electronic components could stunt further earnings growth.

Memory chips account for almost 80% of its operating profit.

Samsung is the world’s top maker of smartphones, with a 20.9% share of the market in the second quarter, according to data from IDC.

Apple smartphone sales stall 

Apple, once the leading smartphone maker, now sits in third place with a 12.1% share of the market while Chinese firm Huawei in second place with a 15.8% share.

Smartphone sales for Apple have stalled in recent years, with its third-quarter results showing iPhone shipments were little changed from the same period a year ago as consumers shrugged off higher prices for its flagship iPhone X model.

Apple reported third-quarter profit of US$11.5, up 32% from the same period a year ago, while sales increased 17% to US$53.3bn thanks to rising demand for its “other products” category including Apple Watch, AirPods earphones, Apple TV and HomePod speaker systems.

READ: Apple crushes estimates in its fiscal third quarter, reporting a boost in services revenue

The company’s services division, which includes Apple Music and various online TV, news and publishing, gaming and cloud-hosting services, was also a driver of growth.

Apple expects fiscal fourth-quarter revenue to be between US$60bn and US$62bn, against analysts' estimates of $59.5bn. The group reports its fourth-quarter earnings on November 1. 

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