Samsung sees Q3 profits jump on demand for chips and displays

But smartphone growth is expected to slow in 2016

Samsung Electronics has reported a jump in profit for the last quarter even as competition in the smartphone market remained intense.

The company reported sales of 51.7 trillion won ($45.1 billion) for the quarter, up 9 percent from the same period a year earlier, and net profit of 5.5 trillion won, up 29 percent, Samsung announced Thursday in Korea.

The higher sales came largely from strong demand for Samsung's chips and flat-panel displays, which account for more than a third of its total business, while profits were helped by the weak Korean won.

Samsung is a major manufacturer of chips and displays, which it uses in its own products and also sells to competitors. Strong demand from smartphone rivals helped to hike sales of memory chips and OLED (organic LED) display panels.

In the company's key smartphone business, Samsung said it saw a significant increase in sales after it sped up the launch of its flagship Galaxy S6 Edge+ and Galaxy Note 5 series phones to try and get an edge on rival Apple.

The success of that strategy has some speculating that its next flagship handset, presumed to be called the Galaxy S7, will be launched a month earlier than normal in January.

However, Samsung profits in the mobile phone business fell slightly from the previous quarter, after the company cut the price of the Galaxy S6 and S6 Edge to help boost sales. It also sold a higher percentage of cheaper, low- and mid-range phones.

IDC said on Wednesday that it estimates Samsung shipped 84.5 million smartphones during the quarter. That put it far ahead of nearest rival Apple, which shipped 48 million iPhones, and third-placed Huawei with 26.5 million shipments.

Looking ahead, the company said it expects smartphone growth to slow, but it thinks its recently launched Samsung Pay service to be key to its mobile phone business. It said improving software and keeping costs down will also be areas of focus.

Copyright © 2015 IDG Communications, Inc.

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