Business     

Smartphones power Samsung to record profit

Shanghai Daily, January 27, 2012

• South Korea's Samsung Electronics today posted a record operating profit of 5.3 trillion won (US$4.72 billion) in the fourth quarter, thanks largely to booming smartphone sales.

  The company, the world's largest technology firm by revenue, is battling US giant Apple for leadership of the global smartphone market.

  It credited its flagship Galaxy S2 and Galaxy Note brands for helping its telecoms businesses achieve a record quarterly operating profit of 2.64 trillion won.

  "Despite intensified competition amid the global economic slowdown, our telecommunications businesses continued to post solid earnings with an enhanced line-up of high-end smartphones, resulting in higher average selling price," said senior vice-president Robert Yi in a statement.

  The overall quarterly operating profit figure, a 76 percent increase year-on-year, was largely in line with the earnings guidance issued early this month by the firm.

  Revenue in October-December was 47.3 trillion won, a 13 percent rise year-on-year. Net profit of four trillion won was up 17 percent on a year earlier.

  For the whole of last year the company logged a net profit of 13.7 trillion won, down 15 percent from the previous year. Revenue rose 6.7 percent to a record 165 trillion won and operating profit declined 6.05 percent to 16.2 trillion won.

  Samsung overtook Apple in the third quarter of last year to become the world's largest seller of smartphones, although it was unclear who held the lead in the fourth quarter.

  The South Korean firm said its smartphone shipments rose about 30 percent in the fourth quarter compared with July-September but gave no number.

  "For the global market outlook for this year, demand for entry-level smartphones and tablet PCs will increase significantly, while the growth momentum for feature phones is expected to stay static," it said in a statement.

  It tipped the overall smartphone market to grow by more than 30 percent this year.

  Samsung, the world's largest maker of flat panels, memory chips and flat-screen televisions, announced capital spending of 25 trillion won this year.

  Some 15 trillion won of the total would be invested in chipmaking, to improve production lines and upgrade technology. Another 6.6 trillion won would be spent on the display panel division.

  The firm also credited a stronger lineup of LED televisions for the improved quarter-on-quarter sales.

  It said its chip business sustained profitability in the fourth quarter despite weak market demand, thanks to a mixture of high-margin products and strong demand for NAND flash memory chips used in smartphones and tablets.

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