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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 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%. | |
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 5.85 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. 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. 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. |