Earnings reports from Samsung Electronics Co. and Sony Corp. underscore the two Asian technology giants increasing reliance on components sales to drive profits as it becomes harder to make money selling smartphones and other consumer electronics.
Samsung, the worlds largest smartphone maker by sales, reported Thursday a decline in net profit of 8% year-to-year for the quarter ended June, while net profit at Sony, its longtime Japanese rival, more than tripled during the same period.
“Chips have been somewhat overshadowed by the company’s smartphone business, but Samsung is doing significantly better than its competitors in the memory-chip market while its nonmemory chip business is now picking up,” said Jonathan Hwang, a Seoul-based analyst with KDB Daewoo Securities.
By switching emphasis to components that they can sell to their own mobile divisions as well as those of competitors, Samsung and Sony are positioning themselves to benefit from the global growth of smartphones, even if most of those smartphones carry other companies’ logos.
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