Samsung's profits soar from holiday sales of phones and TVs
Samsung Electronics posted record profits during the holiday shopping season, on strong sales of mobile phones and TVs from its premium to low-end lineups.
Investors had been concerned about saturation in the high-end smartphone market, but Samsung's flagship Galaxy S3 and Note 2 handsets helped boost net profit by 75 percent in the October to December quarter to 7 trillion won (US$ 6.56 billion) from 4 trillion won a year ago. Revenue for the quarter was 56 trillion won.
Thanks to high seasonal demand, LED TVs sold well both in developed and emerging markets, contributing to a 20 percent sales increase in Samsung's consumer electronics business from a year earlier. The company's semiconductor sales, which include mobile DRAM and NAND chips, grew 10 percent.
On the growing competition in mobile phones, Samsung Senior Vice President Robert Yi said "the market is still ready for surprises," during an earnings conference in Seoul, adding that the company will push for innovation in smartphones and tablets.
Anticipating the next Galaxy
Although there was no specific mention of the highly anticipated Galaxy S4, analysts agree that it will likely come out in April worldwide, at a price point similar to its popular predecessor. The phone will likely run on the new Exynos processor, an eight-core chip designed to improve performance and battery life, said Myungsup Song, analyst with HI Investment and Securities.
"Compared to Apple, Samsung's strength is its wide range of products from low and mid to high-end products ... because of the saturating high-end smartphone market, Samsung and other companies are heavily focusing on the flexible display for making profits," Song said.
Samsung's new unbreakable and bendable plastic display won't be commercialized until 2014, possibly with the introduction of the Galaxy S5, he said.
The South Korean company is estimated to have sold 65 million smartphones in the quarter, according to Brian Park at Tongyang Securities. It probably shipped 14 million Galaxy S3 handsets and 7 million of the larger Galaxy Note 2. Tablets also exceeded expectations, with the Galaxy Note 10.1 shipping about 7 million units, compared to 5 million in the third quarter.
Chief rival Apple sold 47.8 million iPhones and 22.9 million iPads in the October through December quarter.