Samsung surges past Apple in smartphones as mobile division sees record profits

Samsung surges past Apple in smartphones as mobile division sees record profits

Samsung Electronics has reported record profits for its telecoms division as Strategy Analytics reported the company overtook Apple as the world's top smartphone maker in the July-September 2011 period.

Profits from the South Korean firm's telecoms division had more than doubled from a year ago, showing a record 2.5 trillion won (£140m) and accounted for 60% of Samsung's total profit, offsetting a plunge in earnings from its bread-and-butter memory chips.

The figures coincided with the latest shipment figures for smartphones, with Samsung’s share jumping 44% from the preceding quarter to 27.8 million units, up nearly four times from a year ago, according to research firm Strategy Analytics.

Samsung says its sales have skyrocketed thanks to a sleek production system that rapidly brings new products to market.

According to Strategy Analytics' Q3 figures, Apple's iPhone sales shrank by 16% to 17.1 million units in the third quarter. Samsung had 23.8% of the global smartphone market in the third quarter, nine points higher than Apple. Samsung's flagship Galaxy line of products is powered by Google's Android software.

Apple sold fewer phones in the third quarter, missing street expectations for the first time in the year, as customers held off buying iPhones until the October launch of the latest version.

Overall, Samsung – the world's biggest technology firm by revenue – reported a 4.25 trillion won (£239m) operating profit for the July-September quarter. That was down from 4.9 trillion won (£275m) a year ago but up from 3.8 trillion won (£213m) in the preceding quarter.

Samsung said its fourth quarter earnings could be better than the third, boosted by one-off gains from its $1.4bn (£869m) sale of its hard disk drive business to Seagate Technology.

‘I am cautiously optimistic on the fourth quarter outlook at this point. Looking ahead into the fourth quarter, when industry demand is traditionally at its peak, Samsung expects sales of mobile devices to remain strong and flat-panel TV shipments to increase,’ Robert Yi, head of Samsung's investor relations, told analysts.

According to Strategy Analytics, Nokia was the top handset seller in Q3 with a 27.3% market share, followed by Samsung with 22.6% and LG with 5.4%. ZTE took 4.7%, pushing Apple into fifth place with 4.4%.

‘Samsung's rise has been driven by a blend of elegant hardware designs, popular Android services, memorable sub-brands and extensive global distribution,’ said Alex Spektor from Strategy Analytics.

‘Samsung has demonstrated that it is possible, at least in the short-term, to differentiate and grow by using the Android ecosystem.’

Joe Fernandez

Written by Mobile Today
Mobile Today

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