Samsung’s profits have been shrinking recently but the company says that trend is about to end… and it’s due in no small part to the success of the iPhone 6s. The Wall Street Journal brings us word that Samsung has “estimated its third-quarter operating profit rebounded sharply from a year earlier on robust sales of chips and displays used in mobile phones and other gadgets.” While this rebound in profits is certainly welcome news for Samsung, it must be a little bittersweet given that its reversal of fortune in large part from selling components to Apple and to rival Chinese smartphone manufacturers.
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Breaking things down a little further, analysts are estimating that the company’s chip unit accounted for roughly half of its total profits over the past quarter. Samsung produced roughly half of the A9 chips found in Apple’s newest iPhones, while the other half was produced by components supplier TSMC. The company has also been making more money selling displays to Chinese smartphone manufacturers that are cranking out dirt-cheap handsets that are helping to erode the margins in Samsung’s handset business.
Even though Samsung doesn’t expect to see its smartphone profits rebound anytime soon, it’s good to see the company making up for those lower profits with stronger component supply profits. Regardless of how you feel about its smartphones, Samsung is one of the best component suppliers in the business, as even Apple would acknowledge.