Samsung thrives as LG and Sony founder in brutal Q1 in global smartphone market

Samsung posted the fastest quarterly profit growth in its mobile business in nearly three years, cementing its status as the world's top smartphone vendor following Apple's disappointing quarter. But LG and Sony continued to struggle as growth in the worldwide handset market slows to a crawl.

Samsung's early launch of its flagship Galaxy S7 phones paid dividends, and strong backing from carriers helped the company ship 10 million to 11 million units of the devices, outpacing previous models. Samsung's net first-quarter profit rose 14 percent to $4.6 billion, and its mobile business reported an operating profit of $3.4 billion, marking a 42 percent jump from the year prior.

Fellow Korean vendor LG didn't fare as well in mobile during the first quarter, however. While LG's TV business produced record margins, its mobile division reported a loss of $168 million due in part to marketing expenses related to the launch of its new flagship, the G5.

LG reported a 12 percent decline in smartphone shipments and a 15.5 percent drop in mobile revenues during the quarter.

Finally, Sony posted a huge quarter as it narrowed losses from its smartphone business. The company's move to focus on profitability with its Xperia handsets rather than growing market share paid off as its mobile business reported a loss of $566 million, down dramatically from the $1.8 billion in losses the division produced a year ago.

Smartphone vendors continue struggle with slowing worldwide growth as key markets become saturated and as consumers hold on to their handsets longer, extending replacement cycles. Strategy Analytics said today that the global smartphone market shrunk on an annualized basis for the first time in the latest quarter, with shipments falling 3 percent.

Even as the market grinds to a halt, though, the landscape remains competitive and dynamic. IDC reported yesterday that Oppo and Vivo, two relatively unknown Chinese players, ranked among the top five smartphone vendors worldwide in the first quarter, replacing Lenovo and Xiaomi respectively.

Samsung remained the world's largest seller of smartphones in the first quarter, and Apple -- which recently posted a disappointing quarter and has seen its market share drop -- remained in second place. Huawei ranked third in the first quarter.

But first-quarter results may not be indicative of how things will look at the end of the year. Samsung will be hard-pressed to maintain sales of its new Galaxy phones, which have received positive reviews but launched early in the year and now face stiff competition. LG's G5, meanwhile, was launched only a few weeks ago and may gradually gain traction. And while Sony certainly isn't going to grow its market share anytime soon, its mobile business appears to be making progress toward becoming profitable once again.

For more:
- see this Wall Street Journal report
- read this Verge post

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