Samsung Reports $7.4 Billion Profit, Sells 56.3 Million Phones
October 26, 2012 5:04 PM
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Samsung Galaxy S III
Samsung did well, but many worry that it won't see this amount of money rolling in next year as the smartphone market continues to grow competitive
Samsung reported strong financial earnings in the third quarter, but now faces slowed smartphone momentum in the future as the market gets more crowded.
Samsung posted $7.4 billion USD in Q3 2012 operating profit. Net profit rose 90 percent to $5.9 billion USD.
During the third quarter, Samsung sold 56.3 million smartphones, giving it a global market share of 31.3 percent. Apple only sold 26.9 million iPhones in the same quarter. The Samsung Galaxy S III alone accounted for 18-20 million shipments from July to September.
While Samsung did well in the smartphone department, particularly with its Galaxy line of devices, it didn't do so hot in chip sales. The chip division dropped 28 percent to $1 billion USD.
Samsung rocked a healthy profit overall this quarter, but many worry that the electronics maker won't see this amount of money rolling in next year as the smartphone market continues to grow competitive.
In fact, Samsung's profit is expected to grow 16 percent next year -- down from this year's predictions of 73 percent.
Samsung has other strong businesses, like tablets and OLED TVs, but analysts say these sectors aren't quite ready to sell the way that Galaxy is selling.
Samsung's tablets, in particular, haven't been able to keep up with the like of the iPad and Kindle Fire. Now, with the
tablets making a fresh appearance into the market (not to mention Google's Nexus 7 and a refreshed Kindle Fire HD line has made its way into the market), Samsung seems to continuously fall behind.
Samsung also took a hard hit with tablets due to its patent war with Apple.
Apple worked pretty hard to ban Samsung's smartphones and tablets around the world, and successfully accomplished this in countries like Germany and Australia. Samsung launched a few lawsuits of its own regarding
, and was also able to lift the ban on its Galaxy Tab 10.1 in Australia in December 2011. However, Samsung
wasn't so lucky in Germany
, where the Galaxy Tab 10.1 is still banned.
Back in August, a jury in the U.S. District Court for the Northern District of California reached an unfavorable verdict for Samsung, saying that the South Korean electronics maker was
guilty of violating technology patents
. In other words, most of Samsung's smartphones and tablets in question were found guilt of copying Apple's iPhone and iPad designs.
It was ordered to pay $1.05 billion in damages to Apple.
Earlier this week,
Samsung Display decided to cut ties with Apple
, saying it will no longer ship LCDs to Apple next year. Its LCD shipments to Apple have been cut more and more over time due to Apple wanting huge discounts, but the recent patent infringement drama couldn't have helped either.
More recently, an ITC judge found that
Samsung violated four Apple patents
the flat front face with wider borders at the top and bottom, the lozenge-shaped speaker about the display screen; the translucent images for applications displayed on the screen, and the device's ability to detect when a headset is plugged in.
Samsung did get a little bit of relief in the UK, though, when a judge ordered Apple to post a notice on its UK site that Samsung didn't copy the iPad. Apple complied, but
in a very snarky way
This article is over a month old, voting and posting comments is disabled
10/27/2012 3:56:30 PM
I just don't see how Samsung can remain competitive with Apple, Google/Motorola, and Windows since the only thing Samsung generates revenue from is hardware sales.
Samsung sold 2x as many phones as Apple and made less profit. (Recognizing that not all profit came from just phones).
Apple and Windows can control the quality of the apps (no malware) where Samsung has no input in the validation process of apps.
If you can't control the user experience, then you don't control your destiny. I believe Samsung will remain profitable, but I don't see Samsung having the same type of current success. At least not from phones.
"Young lady, in this house we obey the laws of thermodynamics!" -- Homer Simpson
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