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Samsung's semiconductor unit also posts a strong quarter; company loses 3G anti-Apple lawsuit in Germany

Samsung Electronics Comp., Ltd.'s (KS:005930) created a lot of excitement, when it hinted at a blowout quarter, in pre-earnings talk.  But that excitement has since been overshadowed by Apple, Inc.'s (AAPL) own record-setting 3 months.  Now Samsung has popped back into the picture, with its actual earnings results.  
 
I. A Virtual Tie With Apple

After jumping out to a substantial 65 percent sales lead over Apple in Q3 2011, Samsung is now in a virtual tie with its surging rival in global sales.  Samsung moved 36.5 million units in Q4 2011, compared to 37 million from Apple.

Smartphone sales were a boon for Samsung, whose telecommunications unit reported   17.82T Won (~$15.33B USD) in revenue.  That's approximate 38 percent of the South Korean electronics conglomerate's total 47.3T Won (~$42.14B USD) in sales.  The unit also pulled in net revenue (profit) of 2.64T Won (~$2.35B USD), over half of Samsung's total profit of 5.30T Won (~$4.72B USD).  Overall the telecom unit’s revenue was up 52 percent versus last year, while profit was up 79 percent.

While Samsung's budget feature phones continue to surge in sales, creeping towards Nokia, its iconic smartphones are drawing the most attention.  Samsung was the first OEM to sell an Android 4.0 Ice Cream Sandwich phone in the U.S., launching the Galaxy Nexus around Christmas time.  Its Galaxy S II lineup continues to sell strongly, as well.

Galaxy Nexus

The company has a strong equity position, with over 26.88T Won (~$23.95B USD) in cash.  The company plans 47.8T Won (~$41.59B USD) to research in development in 2012 -- far more than Apple.

Galaxy devices, in hand
Samsung was boosted by strong smartphone and mobile device sales [Image Source: 9to5Google]

Speaking of Apple, Samsung also continues to profit off the success of its rival (and others), thanks to its semiconductor division.  Aside from smartphones, semiconductor sales accounted for the majority of the remaining profit for Samsung.  The unit reported 2.31T Won (~$2.06B USD) on sales of 9.17T Won (~$8.17B USD).  Samsung is reportedly the only remaining profitable DRAM maker.  It continues to perform strongly in the system-on-a-chip business, and it actively expanding production on both the 3x nm (DRAM, SoC) and 2x nm (NAND) nodes.

Samsung's Digital Media and Appliances (DM&A) and display panel businesses struggled amidst slowing stables and the floods in Thailand that hurt component supply.  They did remain profitable, though.  The DM&A pulled in 16.96T Won (~$15.11B USD) in sales, but made only 570B Won (~$507.8M USD) in profit.

Overall this will be remembered as a very strong quarter for Samsung, to cap off a record setting year.  But it will also be overshadowed by Apple's surprising comeback.

II. "Sammy" Loses a Round in its German Case Against Apple

In related news, Samsung has lost yet another lawsuit against Apple, this time in Germany.  Both Samsung [1][2] and Apple [1][2][3][4] have been on losing streaks of late in their lawsuit campaigns against each other.  International courts seem to increasingly be opting to throw out as much of these lawsuits as possible, wary of giving either company an unfair competitive advantage.  Both companies are under investigation in the European Union for abusing the intellectual property system.

Gavel court
International courts are growing tired of Apple and Samsung's lawsuits. [Image Source: Grande Prairie]

Judge Andreas Voss, the presiding judge in Mannheim Regional Court, Mannheim, Germany, gave no reason for the dismissal, according to Florian Mueller of FOSS Patents.  Samsung could still appeal his decision to the Karlsruhe Higher Regional Court, but it's unclear if it will.

Samsung still has 3 more 3G/UMTS cases against Apple in Germany, which it hopes will go better than its last two.  Each of the cases deals with specific patents.  Apple is currently pursuing a new sales ban on Samsung's new tablets, which Samsung redesigned specially to try to satisfy the German court's earlier design infringement claims.

A lower court ruled that the redesign was sufficient, allowing Samsung's tablet sales to resume.  Now it remains to be seen whether that ruling holds.


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wait what?
By talikarni on 1/27/2012 1:26:53 PM , Rating: 2
One story says "Apple crushes Android sales", then this story says one company tied the sales... so which is it DT??? Phone sales from one provider (AT&T) claims iPhones outsold all Androids 4:1, yet this story says Samsung tied the total number of Apple phones sold from all providers...
this leads me to believe that either AT&T is padding their numbers, or purposely having their salespeople overly push the Apple products, or someone somewhere is flat out lying about their numbers.

According to the 2 stories:
Worldwide sales -
Samsung 36.5M
Apple 37M

AT&T alone in US:
Apple 7.6M
non-Apple phones 1.8M

That means between Verizon and AT&T, that is only 11.9M Apple phones (with approximated 1.8M for Tmobile) sold in Q4 2011. Add in the overseas sales and that still only puts Apple in the 25-28M range (worldwide including above mentioned US sales), a far cry from the claimed 37M. Approx. 28M and 37M Apple phones sold are VERY different numbers, so someone is fudging the books somewhere.

Samsung worldwide numbers are fairly consistent with reports in the range of 33 to 37M smartphones, AND 58.5M non-smartphone cell sales (according to Engadget).
How many non-smartphones from Apple are there? Oh thats right, none!




RE: wait what?
By Iaiken on 1/27/2012 3:16:08 PM , Rating: 3
The apple figures include the 3G iPads while the Samsung figures don't include the Tab at all, just smart phones.

This is nothing new, both sides cook the numbers in different ways. Samsung didn't even bother to mention the heaps of money that they make from selling chips to Apple. iPhone, Galaxy, it doesn't matter because Sammy makes money off each and every one of them.


RE: wait what?
By messele on 1/27/2012 3:40:40 PM , Rating: 1
The Apple figures ARE just the iPhone, else they would be quoted as iOS 3G devices right? iPad figures are seperate and somewhere around 15m units.

No, the difference is the numbers talked about earlier in the week related to performance in the US, where the biggest difference lays.

This article relates to global sales of mobile devices classed as "smartphones".


RE: wait what?
By testerguy on 1/28/2012 10:46:39 AM , Rating: 2
Apple figures don't include iPads. Flat out wrong.

Apple makes more money than Samsung full stop, Samsung makes very little profit for iPhones (and for their own phones) because to compete they have to be at a lower price point.

It would harm Samsung more than Apple if Apple decided to stop having Samsung manufacturer some parts (like the rest of the subordinate supply base Apple has)


RE: wait what?
By Azethoth on 1/29/2012 3:55:59 PM , Rating: 1
The problem is that Apple reports phones SOLD, whereas virtually all other companies report phones SHIPPED. Assuming that shipped phones then also get sold the two numbers are roughly comparable but over short periods of time you will get weird results if you try to compare them because it takes time for shipped numbers to become sold numbers.

As an example, if everyone magically stopped buying Samsung phones, then that shipped number eventually also becomes the "buried in landfill" number or however they get rid of them. The actual sold number for those shipped phones then becomes 0. However if people magically stop buying iPhones, the sold number remains the same as it is already a historical fact.

To properly compare the numbers you would have to know the average latency between a Samsung phone shipping from its factory to being sold in some region. Then you could fudge the numbers a bit to be comparable.

However, the only thing that really matters is sales, and those are as reported in the article. iPhones get a massive boost this quarter, Droid will likely combine for a bigger yearly total.


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