Mobile revenues were down 6 percent year-on-year and up just 3 percent from Q3 to KRW 22.65 trillion. Operating profit at the IM division, which also includes network equipment, still improved strongly, to KRW 2.50 trillion from KRW 2.23 trillion a year ago.
Samsung said earnings improved due to strong smartphone sales and better profitability for low-end and mid-range mobile products. Shipments of its flagship S7 and S7 Edge phones increased slightly compared to Q3, but as usual Samsung did not release any volume figures.
In 2017, the company expects the smartphone market to slow, but said it sees new areas for differentiation, such as artificial intelligence. Smartphone and tablet demand will be weaker in Q1 due to seasonality, but the company expects its own smartphone sales and revenue to increase compared to Q4, led by the A and J series smartphones. Profit will drop slightly due to increased spending on marketing to boost its brand image after the Note 7 recall. Samsung said it plans to add more high-end features to its mid-range phones in order to increase their competitiveness.
In the semiconductor market, Samsung expects to continue to benefit from the tight supply in the market, which has supported price increases. The semiconductor division grew Q4 sales 12 percent year-on-year to KRW 14.86 trillion, and operating profit nearly doubled, to KRW 4.95 trillion from KRW 2.80 trillion. In 2017, the company will seek to improve profitability in DRAM and NAND amid continued growing demand for data centre servers and mobile devices, while also diversifying its customer base for System LSI to boost profitability.
Samsung is also profiting from rising prices in the display market, although this also affects its TV business. The company remains focused on the high end of the OLED and UHD markets, as the LCD market faces greater competition. The DP unit posted revenues up 14 percent year-on-year to KRW 7.42 trillion, and operating profit at KRW 1.34 trillion versus KRW 0.30 trillion a year ago. Consumer Electronics meanwhile saw sales fall 2 percent to KRW 13.64 trillion, and operating profit dropped to KRW 0.32 trillion from KRW 0.82 trillion.
