Samsung is making less money from phones, but chip sales are up

Samsung Electronics announced a fourth quarter earnings decline on Thursday, its first holiday season drop in three years.

The earnings report wasn’t as gloomy as the past few quarters have been: Samsung made an operating profit of 5.29 trillion won ($4.87 billion) on 52.73 trillion won ($48.6 billion) in revenue. Nearly $5 billion in profits is still a big number, but it’s down from last years 8.31 trillion won in operating profit. Revenue was down from 59.28 trillion won.

Samsung’s struggles in its cash-cow handset division (IT & mobile communications) are well documented: It’s getting beat by Apple on high-end handsets (even in South Korea) and its margins are getting pressured on the low-end from companies such as Xiaomi and Lenovo. In this past quarter, Samsung reorganized much of its mobile executive ranks, firing several VP-level employees, including head of mobile marketing D.J. Lee, while keeping mobile unit head J.K. Shin in charge. Profit from Samsung’s handset division dropped to 1.96 trillion won from 5.47 trillion won in the year-ago period.

Some are wondering whether Apple may have sold more total handsets than Samsung in the most recent quarter. Samsung says its high-end products, specifically the Galaxy Note 4, are seeing “increased sales.”

Photo by Kif Leswing/Gigaom One bright spot in the Samsung Electronics earnings report was for its semiconductor division, which posted a profit of 2.7 trillion won ($2.4 billion). Samsung makes processors as well as memory chips.

Samsung attributed its semiconductor division performance to increased demand for DRAM. But part of it could also be due to Samsung winning contracts for semiconductor fabrication for future Apple iPhones, or it could be because Samsung will likely be using its chips in its own phones instead of ones made by Qualcomm, as has been seemingly confirmed by Qualcomm itself. Samsung also plans to spend more money to boost its chip output, the company said in a statement.

Samsung has already made several major shifts in its handset and overall strategy that haven’t completely shown up in this most recent earnings report.

It has consolidated many of its mid-range devices into a new A Series sporting Samsung’s new aluminum construction, and it appears to be going forward with unique curved displays like those found on the Galaxy Note Edge in future devices. Samsung is also a major player in virtual reality, having released the Gear VR headset in the past few months. It released a phone running its own Tizen operating system, which will start showing up in TVs and other connected durable goods made by Samsung’s consumer-electronics division. In the next year, those decisions will start to have a bigger impact on Samsung’s bottom line.



Samsung is preparing a improved Galaxy Note 4, probably for Korea

Samsung’s Galaxy Note 4 is less than a few months old, but it’s already getting an upgrade: On Monday, Samsung announced a new Galaxy Note 4 variant powered by Qualcomm’s Snapdragon 810 processor.

The Snapdragon 810 will be Qualcomm’s flagship mobile chip in 2015. It’s likely to be at the heart of most of the top-tier Android phones launching this upcoming year — like the Galaxy S6, Sony’s Xperia Z4 and the high-end phone HTC is working onIMG_3533

The new Galaxy Note 4 is likely to benefit from the new silicon in two specific ways.

The United States version of the  Note 4 uses Qualcomm’s Snapdragon 805, which is one of the last 32-bit mobile chips. The Snapdragon 810 uses eight 64-bit cores, which the latest version of Android can take advantage of. Android 5.0 launched without a flagship 64-bit capable phone, and the new Note 4 can fill that gap until more Snapdragon 810-equipped devices hit the market.

The new Note should also be able to take advantage of Category 9 carrier aggregation for LTE-Advanced which should result in faster mobile broadband speeds. The new Note 4 supports aggregating 3 x 20 MHz data channels, so the device can theoretically download data as quickly as 450 Mbps on networks that support it. In reality, users won’t see speeds close to the what can be done in a lab. The United States is somewhat behind other countries at adopting carrier aggregation. For instance, South Korea’s SK Telecom started testing the technology on its network in 2013. AT&T has used only used carrier aggregation to boost speeds in some parts of the United States since March.

The Snapdragon 810-equipped Note 4 will be the phone’s third variant. In addition to the two [company]Qualcomm[/company]-powered versions, there’s a Galaxy Note 4 variant equipped with Samsung’s own Exynos 5433 chip.

[company]Samsung[/company] has a habit of launching slightly upgraded versions of its flagship phones in its home country. Last year, it sold a special version of the Galaxy S5 with a sharper screen and faster processor, but this year’s special Note 4 should be identical to the current Note 4 except for the upgraded processor. Although there’s no official price or word on availability, Americans shouldn’t save their dollars for this device — this phone’s likely staying overseas.

Sharp’s 4K smartphone screens are going to be great for virtual reality

Sharp is working on a screen with a 2560 x 1600 resolution in a 4.1-inch LCD panel, which would work out to an eye-popping 736 pixels per inch. The new screens may not significantly improve your smartphone experience, but the extra pixels could end up being essential for immersive virtual reality.