Galaxy S7 Sales Boost Samsung Earnings

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Samsung earned a bit more than it expected to during the first three months of the year, thanks to robust sales of the Galaxy S7 and S7 Edge smartphones.

On Thursday, Samsung reported a substantive increase in first-quarter profits, which are up 12% from last year. The company says its latest flagship smartphones, the Galaxy S7 and S7 Edge, helped it generate more revenue and stabilized its mobile division. The company is predicting strong handset shipments for the current quarter, too. That forecast suggests that Samsung has reversed slipping sales. 

Earlier this month, Samsung said it was expecting to record profits of about $5.7 billion. Instead, the company saw profits of $5.84 billion on revenue of $44.8 billion. Profits at its smartphone division climbed an impressive 42% from the year-ago period. Samsung's phone business hasn't seen profits in this range since 2014.

Moving forward, Samsung says it believes it will see growing sales for the Galaxy S phones alongside its entry-level Galaxy J series and mid-range Galaxy A series. The company estimates second-quarter shipments, including tablets and wearables, will hover around 90 million units.

Samsung hopes its predictions for continued good sales will ease investor fears. Several weeks ago, analysts suggested launching the S7 and S7 Edge in March, rather than in April, artificially inflated Samsung's first-quarter numbers and stole sales from the second quarter.

The S7 and S7 Edge are excellent devices. Samsung focused on adding features demanded by consumers, such as support for memory cards, a waterproof chassis, and a better camera. The two handsets are among the best available running Google's Android operating system.

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Samsung shipped about 81.9 million phones during the first quarter, estimates IDC, giving it 24.5% of the global market. Samsung doesn't reveal actual sales figures. The S7 and S7 Edge have positioned Samsung far ahead of Apple, which pushed 51.2 million iPhones during the first quarter, a significant drop for the company.

Huawei is a distant third in the overall market. It saw shipments of 27.5 million devices during the first quarter. Somewhat surprisingly, Chinese firms Oppo and Vivo have pushed incumbents including LG and Lenovo out of the top five phone makers.

The S7 enjoyed several weeks on the market with no direct, up-to-date competitors. Since the phone's launch, however, LG began shipping the G5 and HTC began shipping the 10. These Android flagships are excellent options for Android shoppers, and may take sales away from the S7 and S7 Edge during the second quarter.

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