Galaxy phones drive Samsung to record profit
SEOUL, South Korea - Samsung, the world’s largest technology company by revenue, reported another record-high quarterly profit as customers flocked to Galaxy smartphones, helping it outdo rivals even at a challenging time for the global tech industry.
Samsung Electronics' Galaxy Tab tablet computers Samsung Electronics Co. said Friday its net profit swelled to 5.2 trillion won ($4.5 billion) in the April-June quarter, a 48 percent jump from a year earlier.
The earnings were lower than a median forecast of 5.6 trillion won in a poll of seven analysts by Yonhap Infomax, but Samsung shares rose 4.8% in Seoul as investors expect its earnings to continue growing strongly.
Samsung, the world’s largest maker of mobile phones, televisions and memory chips, benefited from runaway demand for its Android-powered smartphones as rivals including Apple Inc. were yet to release new models.
The robust sales of smartphones such as the company’s flagship Galaxy S3 helped Samsung paper over a slowdown in other consumer electronics sectors such as televisions and personal computers that has been painful for its rivals and component suppliers.
Its second quarter operating profit spiked 79% over a year earlier to 6.7 trillion won and its revenue rose 21% to 47.6 trillion won, matching Samsung’s guidance released earlier this month. The operating profit, also at an all-time high, was up 15% from the previous quarter.
Despite nagging worries about debt-crippled Europe, analysts are expecting Samsung to achieve a record-high profit in the third quarter when Galaxy S3 sales are expected to reach a peak before Apple unveils its new iPhone, anticipated in October.
“The third quarter is expected to be marginally positive as demand for consumer electronics goods, including smartphones and tablets, remains strong and a stream of new products hit the market. Supply for display panels is also expected to increase, as TV makers prepare for the year-end holiday season,” Samsung said in a statement.
In a conference call, Samsung’s mobile communications vice president Kim Hyun-joon said growth in global smartphone sales will not be affected by an economic slowdown. Sales of Samsung’s smartphones in China increased significantly and the company expects to sustain mobile growth through expansion in emerging markets, he said.
The increase in smartphone sales, the S3 as well as the Galaxy Note, will also boost sales of Samsung’s mobile processors, helping the company counter weak demand for computer memory chips, analysts said.
In the second quarter, Samsung’s mobile division, which makes smartphones, personal computers and network equipment, contributed 63% of Samsung’s entire operating profit by generating 4.2 trillion won profit.
Although the company does not release its mobile sales figures, Samsung probably outperformed competitors in the top-end smartphone market, while having a tougher time competing with Chinese brands such as ZTE and Huawei in low-end smartphones, analysts said.
Unlike Apple, which makes a limited number of smartphone models, Samsung boasts a wide range of mobile phones with various screen sizes, designs and price ranges. Industry watcher say Samsung might unveil a new version of the Galaxy Note at a German trade fair in the fall to fend off competition from Apple’s new iPhone launch.
Research firm IDC said Samsung shipped 50.2 million smartphones in the April-June quarter, widening its lead over Apple. Apple, which earlier this week reported earnings that fell short of expectations, sold 26 million iPhones in the three month stretch.
The two companies, which together control more than half of the world’s smartphone market, are scheduled to meet on July 30 in a San Jose court for a US trial on mobile patents.
An epic legal battle between the two companies started in April 2010 when Apple accused the South Korean firm of copying its iPhone and iPad designs and has expanded to about a dozen lawsuits in North America, Asia and Europe. Samsung in turn accuses Apple of violating its wireless technology patents.
Despite the legal battles, the two companies continue to have a close business relationship. Samsung is a key supplier of mobile processors for Apple’s iPhone and iPad and Samsung’s component divisions also make display screens and mobile chips for Apple.
Outside the mobile market, Samsung made improvements in flat-screens and TVs but semiconductor profit declined on weak global demand for personal computers.
Most Popular
-
No Viewed Articles yet
Comments
CheeseBoy
Samsung Galaxy S2 and S3 are the best phones in the world so far.Black Berry is going broke and will be history if they do not get with the program
Apple sucks and is over priced for nothing.
Report Abuse
tpaz
I have Galaxy S2 ...viva Android vivaReport Abuse
Mabetha
True that CheeseBoy, Samsung S2 and S3 are the way to go. I upgraded from Blackberry S3 there is a huge difference i dont see myself touching that BB thing again,I can see RIM going with Nokia very soon, their applications are too proprietary.Samsung's best cache was teaming up with Open source OS like Android that has dealt a big blow to Apple's iphones because there is a huge difference when it comes to the ready availability and costs of their applications.
Thats why you see Apple coming up with all those lawsuits against Samsung, fobiding the sale of S2 in Europe, its just a way of slowing down the sales of Samsung smartphones and buy time to sell their own.
I have both an I-pad and a Galaxy tab they all awesome but i must admit the I-pad is for bragging purposes it frustrates with the cost of its apps unless if you jailbreak it, but the Galaxy tab it goes an extra mile in doing the job without having to be routed.
Report Abuse
KasiKid
You must be joking, BlackBerry has more than 70 million users.No mobile can catch up.
Report Abuse
maineman2010
I Love my galaxy tab 7.0Report Abuse
Bhali
Sowetan, did u realy have to report this in "WONs"?..... I mean really!!!!!.What's wrong with Rands and Dollars? Now I feel like I was overcharged for my phone.....thanks a lot Sowetan.
Report Abuse
Tabza325is
@KasiKidYou must be joking, BlackBerry has more than 70 million users.
No mobile can catch up.
Hahaha Kasikid, RIM posted a profit loss this year and a decline in their shares, they even had to delay OS10 for BlackBari, they also announced a staff layoff of close to 5000, they are doing bad boss in the cell market, Android is showing them flames, this is why they even plane to license the next OS to other cell menufacture like Google did with Android, the competition is tough for them.
Report Abuse
Dzel
In the world of mobile devices your platform determines how successful your company is going to be. Android rules and is killing companies one by one. First it was RIM makers of Blackberry, simply put RIM is a dying company and Blackberry is about to go extinct only people who don’t understand technology would buy a Blackberry or if your company does not offer options besides their crappy phones. Nokia is another company in serious trouble; I don’t see Windows saving them from bankruptcy.Apple is another company fighting for its life, the iPod has been made redundant and iPad getting serious competition for Android phones. Their weakness is their system is too closed and rely on proprietary software. They too just committed suicide by ditching Google Maps in a case of cutting your nose to spite your face.
Samsung is simply too good for its competitors. I have an entry level phone but if you know how to pimp a phone you can take the simplest of phones and turn it into a super phone, I just love its Wifi capabilities, with a click of a button I can turn my phone into a mobile network. I hear Galaxy S3 has phone into a super-intelligent device I can’t wait to lay my hands on it.
Report Abuse
Dzel
KasiKidYou must be joking, BlackBerry has more than 70 million users.
No mobile can catch up.
====================================================
My brother Blackberry is like a terminally ill patient, RIM's top executives resigned in droves as their phones did poorly on the market. Get yourself an Android device and look at its interface; how easy it is to use, graphics, ease to get apps you need, visit Google's Play Store and look at the range of apps. Normally I can get an app and install it within a minute and most are brilliant apps.
I don't use CDs in my car, 15GB of music played with pristine clarity plus amazing graphics. Like I said why get an iPod when I can download PowerAmp and get probably one of the best musical experiences complete with amazing graphics and controls.
You have to have experiences Android for you to understand just how far ahead Samsung is of Blackberry, the two are not even running the same race.
Report Abuse
tpaz
@Dzel, I agree.Report Abuse
Read all 11 comments