Smart Money

Image source: Bernard Hermant @bernardhermant - Unsplash

What's going on?

Samsung announced on Wednesday that it’s projecting a 44% jump in last quarter’s profit, as a homebound world kitted out their kitchens with unnecessary – but admittedly really cool – gear.

What does this mean?

Samsung is all set to report its first-quarter earnings at the end of the month, but clearly it couldn’t contain itself till then: the company revealed that its profit is poised to climb by just as much as analysts are expecting. That surge is probably down to strong sales of smartphones and home appliances, which have offered locked-down customers something to spend their money on in the absence of, y’know, active social lives.

Why should I care?

For markets: Everyone’s hungry for chips.

Samsung’s investors have good reason to be feeling positive about the company’s future profitability: it’s the world’s biggest maker of memory chips, and that’s a good business to be in nowadays. See, there’s a global shortage of semiconductors because of strong demand for anything electronic, and that’s been driving up their prices since March. And with the shortage expected to last for two more years, they might have a lot higher to rise…

The bigger picture: Are smartphones a dying business? 

The launch of Samsung’s latest smartphone in January boosted its market share too, with the company’s sales representing 23% of the global smartphone market last quarter. That’s up from 16% the quarter before, when arch-rival Apple poached the top spot for the first time in four years. LG Electronics, for its part, seems fed up of being the third wheel in this will-they won’t-they: the manufacturer announced on Monday that it’s quitting the smartphone market altogether to focus on electric vehicle (EV) components. That might be a smart move: the EV market is only just taking off, while fresh data has shown a 10% fall in the global smartphone market last year – the third drop-off in a row (tweet this).

Originally posted as part of the Finimize daily email.

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