Samsung had the smartphone bump Apple was missing thanks to the Galaxy S7

 
Lynsey Barber
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Samsung's bet on the Galaxy S7 paid off... this month (Source: Getty)

Samsung and Apple have just demonstrated exactly how important the cycle of mobile phone production now is to their bottom line.

Without the hype of a new device for Apple (the iPhone SE doesn't count), the tech giant experienced its first slowdown in more than a decade. Over at Samsung, it's a different story.

Sales in the first quarter surged at the South Korean tech firm, largely thanks to its smartphone business and in particular the recent launch of the Galaxy S7.

Operating profit in its handset business alone jumped 42 per cent to 5.3 trillion won (£3.2bn) for the three months to the end of March hitting a two-year high. Shipments of smartphones and other devices hit 92m in the period.

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In the next quarter that will inch down, however, it still predicts a growth in sales from the S7 as well as its lower end models in the next quarter.

Operating profit across the entire business was up 12 per cent to 6.7 trillion won and ahead of the 6.6 trillion won expected.

The earlier than usual launch of the S7 took advantage of a lull in the iPhone production cycle, between last year's iPhone 6s and 6s Plus and the iPhone 7 expected this autumn. That bet has now paid off.

Whether that bump will pay off in the long term remains to be seen.

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"The faster release surely helped but it’s dubious whether the S7 can continue to surprise the market in the longer run," said Dongbu Securities analyst Yoo Eui Hyung told Bloomberg earlier this month after Samsung released preliminary earnings.

The entire smartphone market has slowed, with analysts suggesting saturation point. While even Apple has felt this, those such as Samsung as well as other rival smartphone makers have struggled even in the good times.

The latest analyst estimates, this time from Strategy Analytics indicate found a three per cent dip year-on-year on global shipments to 345m in the first quarter. That's the first ever slowdown in smartphone shipments in history.

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