Samsung profits get smartphone boost

The Galaxy S4 is expected to further boost Samsung's profits

The Galaxy S4 is expected to further boost Samsung’s profits






Samsung Electronics has posted a record quarterly profit, boosted mainly by growing sales of its smartphones.

It made a net profit of 7.15tn won ($6.4bn; £4.2bn) during the period, up from 5.05tn won a year ago. Profits also rose from the previous quarter.

The results are in sharp contrast with rival Apple, which earlier this week reported a drop in quarterly profits for the first time in a decade.

Samsung displaced Apple as the world’s biggest smartphone maker last year.

Bryan Ma of research firm IDC said that the South Korean firm was doing “very very well right now”.

“They have a lot of momentum behind what they are doing around phones, and clearly from a consumer perspective, they have a lot of excitement around their devices.

“They have a lot of their competitors wondering what they are going to do.”

‘Great strategy’
Samsung has enjoyed great success with its smartphone division.

According to the latest figures, profits there rose more than 55% to 6.51tn won during the first three months of the year, from a year earlier.

Analysts said that a key factor behind Samsung’s success is that it offers a much broader range of models than its rival, Apple, which sells only the iPhone.

“It has a great strategy of targeting its devices to multiple consumer at multiple price points,” Andrew Milroy of Frost & Sullivan told the BBC.

Mr Milroy explained that by offering a cheaper range of smartphones Samsung had been able to tap into a bigger share of consumers, especially in the emerging markets.

“The hardware Samsung is offering is as good as Apple in the eyes of many,” he said.

However, Samsung warned that growth in the lower-end smartphone market may slow in the coming months, not least because other manufacturers are also looking to enter the sector.

“We may experience stiffer competition in the mobile business due to expansion of the mid-to-low end smartphone market,” said Robert Yi, head of investor relations at Samsung Electronics.

‘Competitor to beat’
Samsung’s latest smartphone offering, the Galaxy S4, is set to hit the stores on Saturday.

The smartphone, launched earlier this year, allows users to control its screen using only their eyes and has the ability to take two different pictures at once.

Despite mixed reviews from critics, analysts expect it to generate robust sales. Some have even forecast sales of almost 22 million units in just the second quarter.

Meanwhile, Samsung’s biggest rival, Apple, is not expected to introduce a new iPhone model at least till the latter half of the year.

Many analysts have said that should give Samsung an opportunity to further consolidate its position in the sector.


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