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Samsung outstrips Apple smartphone sales to ring up record profit Samsung outstrips Apple smartphone sales to ring up record profit
(40 minutes later)
A surge in Galaxy smartphone sales fuelled earnings at Samsung to a record high in the first quarter, usually a tough season for the global consumer electronics industry, outshining handset rivals such as Nokia. A surge in Galaxy smartphone sales fuelled earnings at Samsung Electronics to a record high in the first quarter, usually a tough season for the global consumer electronics industry, outshining handset rivals such as Nokia.
Samsung sold more smartphones in the first three months of the year than Apple and raked in more than 70% of its operating profit from mobile businesses. Shares in Samsung shot up nearly 3%. Samsung sold more smartphones in the first three months of the year than Apple and raked in more than 70% of its operating profit from mobile businesses. Shares in Samsung shot up nearly 3%.
Net profit nearly doubled from a year earlier to a record 5.05tn won (£2.75bn) for the quarter to 31 March. Net profit nearly doubled from a year earlier to a record 5.05 trillion won (£2.75bn) for the quarter to 31 March.
Operating profit also hit a record high, at 5.85tn won, which was in line with expectations. Sales rose 22% from a year earlier to 45.3tn won. Operating profit also hit a record high, at 5.85 trillion won, which was in line with expectations. Sales rose 22% from a year earlier to 45.3tn won.
Strong demand for high-end smartphones, such as the Galaxy Note and the Galaxy S2 introduced last year, helped mask lower profit from memory chips, another Samsung flagship business.Strong demand for high-end smartphones, such as the Galaxy Note and the Galaxy S2 introduced last year, helped mask lower profit from memory chips, another Samsung flagship business.
"It was a shock for semiconductor, a surprise for handset," said Lee Ka-keun, a Seoul-based analyst at Hana Daetoo Securities."It was a shock for semiconductor, a surprise for handset," said Lee Ka-keun, a Seoul-based analyst at Hana Daetoo Securities.
The Suwon, Korea-based company expects to outdo its record profit in the coming quarters. It will announce a new version of the Galaxy phone next week and global demand for personal computers is picking up, bringing more cash to memory chip-makers.The Suwon, Korea-based company expects to outdo its record profit in the coming quarters. It will announce a new version of the Galaxy phone next week and global demand for personal computers is picking up, bringing more cash to memory chip-makers.
"We cautiously expect our earnings momentum to continue going forward, as competitiveness in our major businesses is enhanced," Robert Yi, head of investor relations, said."We cautiously expect our earnings momentum to continue going forward, as competitiveness in our major businesses is enhanced," Robert Yi, head of investor relations, said.
Samsung's mobile communications division, which includes smartphones, pocketed 4.27tn won of operating profit in the quarter after seeing significant sales growth of high-end smartphones in developing markets including China, a key battlefield for mobile phone makers.Samsung's mobile communications division, which includes smartphones, pocketed 4.27tn won of operating profit in the quarter after seeing significant sales growth of high-end smartphones in developing markets including China, a key battlefield for mobile phone makers.
After narrowly beating Apple last year, Samsung's smartphone sales exceeded Apple's by a large margin in the first quarter. Strategy Analytics said Samsung became the world's top smartphone maker, selling 44.5m handsets in the January-March period, followed by Apple's 35.1m.After narrowly beating Apple last year, Samsung's smartphone sales exceeded Apple's by a large margin in the first quarter. Strategy Analytics said Samsung became the world's top smartphone maker, selling 44.5m handsets in the January-March period, followed by Apple's 35.1m.
Yet Apple's iPhone and iPad business remains more lucrative. The Cupertino, California-based company earned $11.6bn (£7.2bn) in the January-March quarter, more than twice as much as Samsung, even though its revenue was about 10% less.Yet Apple's iPhone and iPad business remains more lucrative. The Cupertino, California-based company earned $11.6bn (£7.2bn) in the January-March quarter, more than twice as much as Samsung, even though its revenue was about 10% less.
Once regarded as a laggard in smartphones, Samsung moved rapidly to take on Apple with Google's Android operating system.Once regarded as a laggard in smartphones, Samsung moved rapidly to take on Apple with Google's Android operating system.
Samsung's rise came largely at the expense of Nokia. The Finnish handset giant, which had been the world's biggest handset maker since 1998, reported a dismal loss in the latest quarter and fell behind Samsung in shipments. Samsung's rise came largely at the expense of Nokia. The Finnish handset giant, which had been the world's biggest handset maker since 1998, reported a dismal loss in the latest quarter and fell behind Samsung in shipments. According to Strategy Analytics data, Nokia sold about 10m fewer handsets than Samsung in the quarter.
According to Strategy Analytics data, Nokia sold about 10m fewer handsets than Samsung in the quarter.
Samsung's mobile business president, Shin Jong-kyun, told reporters in February that it eyes 380m handset sales this year, including 200m smartphones. The company shipped 330m handsets in 2011, including 97m smartphones.Samsung's mobile business president, Shin Jong-kyun, told reporters in February that it eyes 380m handset sales this year, including 200m smartphones. The company shipped 330m handsets in 2011, including 97m smartphones.
While Samsung fights Apple in the smartphone and tablet markets and in bitter patent lawsuits on four continents, its first-quarter results also owed something to brisk sales of Apple's iPhone and iPad.While Samsung fights Apple in the smartphone and tablet markets and in bitter patent lawsuits on four continents, its first-quarter results also owed something to brisk sales of Apple's iPhone and iPad.
Apple, which is Samsung's key customer in its semiconductor and display screen businesses, was credited for helping turn around Samsung's display-panel division into profit.Apple, which is Samsung's key customer in its semiconductor and display screen businesses, was credited for helping turn around Samsung's display-panel division into profit.
Samsung's display-panel business posted a 280bn won profit as increased sales of lucrative 3D TV panels and high-resolution tablet PC panels propped up the bottom line.Samsung's display-panel business posted a 280bn won profit as increased sales of lucrative 3D TV panels and high-resolution tablet PC panels propped up the bottom line.
Samsung, which is the world's biggest supplier of memory chips, said its operating profit from its semiconductor business in the first quarter reached 760bn won, less than half that of a year earlier. Samsung, which is the world's biggest supplier of memory chips, said its operating profit from its semiconductor business in the first quarter reached 760bn won, less than half that of a year earlier. Weak demand for personal computers hit memory chip prices and forced Tokyo-based Elpida Memory to file for bankruptcy in February.
Weak demand for personal computers hit memory chip prices and forced Tokyo-based Elpida Memory to file for bankruptcy in February.
The division that makes TVs and home appliances posted 530bn won in operating profit. Samsung is the world's largest maker of flat-panel TVs, a sector in which it competes with LG of South Korea and Sony of Japan.The division that makes TVs and home appliances posted 530bn won in operating profit. Samsung is the world's largest maker of flat-panel TVs, a sector in which it competes with LG of South Korea and Sony of Japan.