Samsung and Spotify are raking it in. But there’s a catch

By

Election contributions by Apple employees for heavily toward Democrats
There's a whole lot of cash coming in.
Photo: Pixabay/Pexels CC

Ahead of Apple postings its latest quarter results today, two of the company’s rivals — Samsung and Spotify — have published their own calendar Q3 results. And they’re good. But there’s a catch in both cases.

Samsung, in particular, reported its highest ever quarterly revenue. Operating profits for the South Korean tech giant soared 59 percent to $10.9 billion during the quarter. It reflects “significant increase in consumer demand” for electronics goods. Samsung sales rose 8 percent during the quarter to $59 billion. That’s better than many analysts expected.

Sales of Samsung phone increased close to 50 percent during the September quarter. Samsung shipped 88 million phones during the period, and around 9 million tablets. It also experienced strong demand for its chips.

So what’s the problem? Nothing… for this quarter. But Samsung warns that it’s great quarter isn’t likely to last for the rest of the year. It predicts that profits will fall in the last three months of 2020. Part of the reason for this is increased competition in the smartphone sector with the launch of the new iPhones. This is Apple’s first 5G iPhone generation, which should put some added pressure on Samsung.

And Spotify…

Meanwhile, Apple Music rival Spotify grew its number of total active monthly users to 320 million, grew premium subscribers to 144 millin, and reduced churn (turnover among existing users) to under 4 percent, the streaming giant has revealed in its Q3 earnings.

Although Apple has not recently revealed its Apple Music paid subscriber total, last time it did so that number was at 60 million. Spotify’s 27 percent jump year-on-year could suggest that it’s widening the gap more than ever.

Spotify also commented on the success of its podcasting efforts this quarter. In its summary of the quarter it writes that:

“Q3 was a standout quarter for our podcasting efforts, beginning with the July launch of The Michelle Obama Podcast, an Original & Exclusive (“O&E”) podcast that became the #1 show globally on our platform in July and August, making it our top summer podcast. In September, The Joe Rogan Experience arrived on platform with video capability and became the #1 show in all of our English-speaking markets while outperforming our audience expectations. We look forward to the start of our exclusivity period for this podcast by the end of this year.”

On a financial level, it notes that total revenue for the quarter grew to 1.98 billion euros ($2.3 billion). However, despite this, it still made a loss of some 101 million euros ($118 million) in the quarter. There’s certainly plenty of reason to be excited about what Spotify is doing, but it’s still far from a consistently profitable company.

Source: Spotify and CNET