Sat, Apr 06, 2013 - Page 15 News List

Samsung expects sharp profit boost from phone sales

AFP, SEOUL

South Korea’s Samsung Electronics yesterday said it expected a sharp increase in first-quarter operating profit to 8.7 trillion won (US$7.7 billion), up 52.9 percent from the first three months of last year.

Samsung, the world’s largest technology firm by revenue, was giving earnings guidance before official results are made available later this month.

The January-March operating estimate comes after a record quarterly operating profit of 8.8 trillion won in the fourth quarter of last year.

SMARTPHONES

Samsung profits soared last year, largely on the back of sales in the lucrative smartphone market.

Sales in the first quarter of this year were expected to reach 52 trillion won, up 14.9 percent from a year earlier, but down 7.2 percent from the previous quarter.

While Samsung overtook Nokia as the world’s largest mobile-phone maker and Apple in smartphones last year, Apple was twice as profitable as Samsung in terms of gross profit margin, analysts say.

Mobile devices generate the bulk of profits at both companies. Analysts say an increased presence in the high-end market will be crucial for Samsung in maintaining margins for its mobile business amid stiff competition.

HIGH-END MARKET

“Samsung still lags behind Apple in the high-end market,” which is where the money is, Lee Sun-tae, a Seoul-based analyst with NH Investment and Securities told Dow Jones Newswires.

Samsung is estimated to have sold 25 million smartphones each month this year, which puts its quarterly sales at more than 70 million units, according to Hong Kong-based market researcher Counterpoint Research.

The South Korean firm continued to dominate the global smartphone market in terms of market share, with its stake in the first two months of the year standing at 35 percent, compared with 32 percent in the fourth quarter of last year, Counterpoint said.

Samsung unveiled the fourth series of its Galaxy smartphone line-up at a New York launch event last month and is set to roll out the device starting this month.

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