As US Apple gasps, S Korean Samsung earns record profit
27 April 2013 2:54 AM GMT
Samsung Electronics Co said on Friday that its first quarter (January- March) profit jumped to a record high as smartphone sales remained strong despite the delayed April launch of an updated version of its flagship Galaxy phone.
Sales of consumer electronics usually slow in the first three months of the year after the holiday shopping season, an effect that analysts thought would be compounded by this month's release of the Galaxy S4 smartphone since many delay buying until the newest model is available. Apple Inc has cited the upcoming release of a new iPhone as a reason for a slowdown in sales of older models.
Samsung began sales of the S4 in its home South Korean market on Friday and starts US sales from Saturday. Analysts expect Samsung's profits to reach new highs in the second and third quarters if S4 sales are strong. Lee Don-Joo, head of sales and marketing at Samsung's mobile division, said sales of the S4 will outdo its predecessor, the Galaxy S III.
Samsung said January-March net profit soared 42 percent to 7.2 trillion won ($6.5 billion) from 5 trillion won a year earlier. That increase was despite booking a one-time charge against earnings related to settlement of its intellectual property battle with Apple. Analysts estimated the charge at $600 million. Sales rose 17 per cent to 52.9 trillion won. Operating profit was up 54 per cent to 8.8 trillion won, in line with its preliminary results released earlier this month.
Profit was up 2 per cent from the previous quarter's result, beating market expectations for a fall. Sales of the S III smartphone and the oversized handset called the Galaxy Note remained strong and shored up profit, Samsung said. It also spent less on marketing its mobile devices than it did in the previous quarter when competition heated up.Samsung's IT and Mobile Communications division that makes smartphones, tablets, PCs and cameras reported 6.51 trillion won in operating income for the first quarter, up 56 per cent from a year earlier and its highest since Samsung reorganized the division to merge PC and handset departments.
Samsung capitalized on global demand for smartphones with a range of mobile devices that come in a variety of screen sizes and prices, outpacing rivals including Apple Inc and Nokia Corp.
As the S4 goes on sales several months before rival Apple introduces a new version of iPhone, analysts said Samsung's streak of record-setting profit will not stop any time soon.
'You can say it is like a snowball is rolling,' said James Song, head of technology at Daewoo Securities. Song forecast Samsung's second quarter operating income to surpass 10 trillion won ($9 billion).
ALARM BELLS FOR IPHONE AS SAMSUNG LAUNCHES GALAXY S4
Korean handset maker Samsung on Friday launched the fourth generation of its Galaxy range of phones, S4 in India at Rs 41,500.
The phone, packed with newer imaging features as well as 'gesture-control' technology will be available at the company's premium brand stores in Delhi, Bangalore, Hyderabad and Mumbai from 12 noon onwards tomorrow, while pan-India availability will be in a couple of days.
'At Samsung, we are committed to innovation and to our consumers...we are proud to announce the launch of our flagship device and the much awaited, Samsung Galaxy S4,' Samsung Electronics President and CEO (South West Asia) B D Park said here. The company had unveiled the phone in the US last month.
The S4 features a five-inch full HD super AMOLED touchscreen, 13 mega pixel back and 2MP front camera and supports 3G networks. It comes with two processors, 1.6 GHQ quad core processor and 1.2 GHz quad core processor. Asked about the competition Samsung is facing from local manufacturers which are offering smartphones with similar features at a lower price point, Samsung Mobile and Digital Imaging Head Vineet Taneja said: '...I can assure you that none of the stuff that we spoke about on S4 is actually available easily in other smartphones.'
He said the company invests huge amount of money on its R&D set up across the world including India in order to ensure the hardware is rock solid and state-of-the art.
Sales of consumer electronics usually slow in the first three months of the year after the holiday shopping season, an effect that analysts thought would be compounded by this month's release of the Galaxy S4 smartphone since many delay buying until the newest model is available. Apple Inc has cited the upcoming release of a new iPhone as a reason for a slowdown in sales of older models.
Samsung began sales of the S4 in its home South Korean market on Friday and starts US sales from Saturday. Analysts expect Samsung's profits to reach new highs in the second and third quarters if S4 sales are strong. Lee Don-Joo, head of sales and marketing at Samsung's mobile division, said sales of the S4 will outdo its predecessor, the Galaxy S III.
Samsung said January-March net profit soared 42 percent to 7.2 trillion won ($6.5 billion) from 5 trillion won a year earlier. That increase was despite booking a one-time charge against earnings related to settlement of its intellectual property battle with Apple. Analysts estimated the charge at $600 million. Sales rose 17 per cent to 52.9 trillion won. Operating profit was up 54 per cent to 8.8 trillion won, in line with its preliminary results released earlier this month.
Profit was up 2 per cent from the previous quarter's result, beating market expectations for a fall. Sales of the S III smartphone and the oversized handset called the Galaxy Note remained strong and shored up profit, Samsung said. It also spent less on marketing its mobile devices than it did in the previous quarter when competition heated up.Samsung's IT and Mobile Communications division that makes smartphones, tablets, PCs and cameras reported 6.51 trillion won in operating income for the first quarter, up 56 per cent from a year earlier and its highest since Samsung reorganized the division to merge PC and handset departments.
Samsung capitalized on global demand for smartphones with a range of mobile devices that come in a variety of screen sizes and prices, outpacing rivals including Apple Inc and Nokia Corp.
As the S4 goes on sales several months before rival Apple introduces a new version of iPhone, analysts said Samsung's streak of record-setting profit will not stop any time soon.
'You can say it is like a snowball is rolling,' said James Song, head of technology at Daewoo Securities. Song forecast Samsung's second quarter operating income to surpass 10 trillion won ($9 billion).
ALARM BELLS FOR IPHONE AS SAMSUNG LAUNCHES GALAXY S4
Korean handset maker Samsung on Friday launched the fourth generation of its Galaxy range of phones, S4 in India at Rs 41,500.
The phone, packed with newer imaging features as well as 'gesture-control' technology will be available at the company's premium brand stores in Delhi, Bangalore, Hyderabad and Mumbai from 12 noon onwards tomorrow, while pan-India availability will be in a couple of days.
'At Samsung, we are committed to innovation and to our consumers...we are proud to announce the launch of our flagship device and the much awaited, Samsung Galaxy S4,' Samsung Electronics President and CEO (South West Asia) B D Park said here. The company had unveiled the phone in the US last month.
The S4 features a five-inch full HD super AMOLED touchscreen, 13 mega pixel back and 2MP front camera and supports 3G networks. It comes with two processors, 1.6 GHQ quad core processor and 1.2 GHz quad core processor. Asked about the competition Samsung is facing from local manufacturers which are offering smartphones with similar features at a lower price point, Samsung Mobile and Digital Imaging Head Vineet Taneja said: '...I can assure you that none of the stuff that we spoke about on S4 is actually available easily in other smartphones.'
He said the company invests huge amount of money on its R&D set up across the world including India in order to ensure the hardware is rock solid and state-of-the art.
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