Samsung expects 10 percent profit growth on better-than-expected Galaxy S7 sales

Samsung Galaxy S7 Edge teaser 001

According to preliminary results posted Thursday, there’s a light at the end of a long tunnel for Samsung Electronics and that light is the new Galaxy S7 flagship smartphone. After more than two straight years of decline in its mobile division, the South Korean firm is now projecting more than ten percent profit growth for the first quarter of 2016, beating market estimates.

The Galaxy S7 and Galaxy S7 edge were announced back in February ahead of their March 11 debut. Both phones, which have managed to address some of user complaints like memory expandability, were met with mostly positive reviews. Thus far, the new devices have moved three times as many units in their first month compared to their predecessor,  the Galaxy S6/edge series, according to Bloomberg.

The new Galaxies have sold an estimated nine million units during their first month (Samsung does not divulge smartphone unit sales for competitive reasons), or three times more than the previous-generation Galaxy S6 in the same time-frame. By comparison, Apple reported 13 million iPhone 6s and iPhone 6s Plus sales in just one weekend.

“Production of curved displays for its Edge version also went more smoothly this time, avoiding the hiccups that plagued last year’s wraparound-screen line while holding down costs,” said the news gathering organization.

The new Galaxy, of course, has a head start on Apple’s forthcoming iPhone 7, which is expected around the usual fall timeframe like prior iPhones.

Samsung is projecting consolidated operating profit of 6.6 trillion Korean won, or $5.7 billion. Not only would that figure represent a 10.4 percent increase from the year-ago quarter, but is also above general consensus of 5.53 trillion won, according to polls conducted by Bloomberg.

Some analysts quoted in the article have reservations as to the Galaxy S7’s ability to sustain strong sales amid factors like strong competition from Huawei, Xiaomi, Apple’s cheapest iPhone yet, the new iPhone SE, and depressed industry demand.

Source: Bloomberg