Samsung to Break Another Profit Record, Creeps Closer to Apple
April 5, 2013 12:34 PM
comment(s) - last by
(Source: Getty Images)
And that's all without the Galaxy S IV
Apple, Inc. (
) won't announce its fiscal Q2 2013 (calendar Q1 2013) quarterly earnings until April 23, but South Korea's Samsung Electronics Comp., Ltd. (
), has already started things off with a bang,
impressive earnings guidance. The record profits come before the company even started shipping its flagship smartphone,
the Galaxy S IV
, which will go on sale later this month.
I. Samsung Approaches Apple in Profitability
With Apple predicted to draw $10.1B USD, Samsung showed just how close it is getting to the American firm in profitability. Samsung's earnings guidance suggests an 8.7T won ($7.7B USD) profit, up over 50 percent from the 5.7T won ($5.0B USD) profit it
posted in the first calendar quarter of 2012
. Samsung predicts sales of around 52T won ($45.93B USD).
That's a bit of a surprise --
of 10 analysts by UK-based
, a Pearson PLC unit (
), found an expectation of 8.0T won ($7.0B USD) in profit. A newer compilation
of 39 analysts' predictions showed an average expectation for 8.4T won ($7.4B USD) in profit.
Samsung is nearing Apple in profitability. [Image Source: Cult of Mac]
Samsung's mobile sales are expected to rise around 40 percent on a year-to-year basis. Mobile is expected to post a profit of around 6.25T won ($5.5B USD), remaining Samsung's most lucrative division (Samsung's large component electronics, display, and household electronics units typically post leaner margins).
When you take just the smartphone sales of Samsung's mobile unit, the company appears to be nearly as profitable as its archrival Apple, a feat analysts long thought would be impossible for an Android phonemaker.
It was an eventful quarter for Samsung, which saw Apple's $1.05B USD copyright infringement verdict over it
start to unravel
pair of patent invalidations
U.S. Patent and Trademark Office
(USPTO). Samsung also
scored a 3 percent stake
in rival Japanese TV display maker Sharp Corp. (
), paying around 10.4B yen ($108M USD). The move could be
a threat to Apple's supply chain
, as Sharp is the second largest producer of iPhone displays.
II. Galaxy Phones Outsell iPhones by Almost 2-to-1
Samsung does not announce its unit sales of smartphones, but IBK Securities analyst Lee Seung Woo predicts that the record sales will come on the back of 68.5m smartphones sold globally.
, according to the
analyst survey, to have sold around 37m iPhones in the first three months of 2013, indicating a roughly 2-to-1 lead in unit sales for Samsung.
The Galaxy S IV lands later this month. [Image Source: Samsung]
The earnings guidance may further trouble Apple investors who were recently disturbed by a
from Citigroup Inc. (
) analyst Glen Yeung who suggested Apple may
its own earnings guidance. Mr. Young is predicting Apple may make as little as $40.5B USD in revenue (which in turn would indicate a "weaker" profit in the $9B USD ballpark).
He predicts Apple will only move 34 million smartphones for the quarter (almost precisely half Samsung's shipments). In his note he wrote, "In conducting our regular field work with the hardware supply chain, we again find evidence of reduced demand to Apple's suppliers for iPhone 5 related components. While production does not directly translate to sales (for example, we estimate Apple finished 1Q13 (Dec) with [around] 10M iPhone units in inventory), we suspect this is an indication of softer demand for iPhone 5 and iPhone 4S."
Samsung has stated that it hopes to climb to 390m smartphone sales in 2013.
III. Packed Lineup of High-End Hardware Ahead
What's more, Samsung appears to be firing on all cylinders without even unleashing its strongest weapon -- the Galaxy S IV. Excitement for the GSIV -- which packs a bigger screen (5-inches; 1080p), better camera (13 MP) and hands-free gestures -- is running wild. In his note Lee Seung Woo predicts Samsung to sell 82m smartphones in Q2 2013.
The Galaxy S IV is expected to be a top seller this summer.
Nomura Holdings, Inc. (
) analyst Chung Chang Won told
that the GSIV is expected to be a fast seller out the gate, commenting, "Second-quarter profit [April-June] looks even better than the first, as the Galaxy S4 will have a great impact. Samsung’s shipments of its flagship smartphone will outpace that of the iPhone sometime in the second or third quarter."
There are more boosts waiting on the horizon as well. Samsung is expected to refresh its popular Galaxy Note tablet mid-year. The company is also rumored to be producing
a superphone with an Intel
) powered processor, which will run Intel and Samsung's co-developed Tizen mobile Linux kernel/UI. And there are rumors of a
6.3-inch Android "Galaxy Mega"
smartphone on the horizon. Last, but not least, Samsung is rumored to be slating a GSIV-like smartphone for release with Microsoft Corp.'s (
Windows Phone Blue platform
Like Apple, Samsung is rumored to be developing
a wristwatch-like smartphone/mini-tablet/media-device
In short, Samsung has a packed lineup on the high end while Apple is not expected to launch its iPhone 5S (or iPhone 6, possibly) counteroffensive until June 2013 at the earliest [
IV. U.S. Sales Still Need Improvement, But Samsung Excels in China
If there's one weak spot in Samsung's stellar performance, it's U.S. sales -- which happen to be the strongest spot for Apple. In September-November Apple grew its share of U.S. subscribers to 39.8 percent, while Samsung only reached 21.3 percent. While that balance will likely shift with the GSIV launch, it remains to be seen if Samsung will be able to beat Apple in its home court.
However, Samsung stands head and shoulders above Apple in performance in developing markets. While the iPhone is seen as a status symbol among China's elite, Apple is still
reeling from a PR disaster
regarding poor warranty support in China, which led the nation's state-run media publications to skewer the American firm with scathing articles.
Samsung is performing well in China, even as Apple reels from negative publicity.
[Image Source: Venture Beat]
Glen Yeung -- the same Citi analyst who
an Apple miss for this last quarter -- says that the Chinese boondoggle could cost Apple around $13B USD in sales, owing to ill-will in the nation's largest mobile market.
Samsung meanwhile continues to ascend in Chinese sales and enjoys a warm relationship with the Chinese media. Meritz Securities analyst notes, "In addition to the Galaxy S3, mini models sold well in emerging markets, including China, Brazil and India. Samsung’s continued ascent in the smartphone industry seems to be unparalleled."
Samsung on Newswire
This article is over a month old, voting and posting comments is disabled
RE: Griping over an American company
4/6/2013 9:31:46 PM
Na na na boo boo , Google's better than you!
Google is better? You are a moron. Even google fears Samsung. It's not Google v Apple idiot. It's Samsung vs Apple and Samsumg makes plastic junk. Enjoy it. I wonder how many page hits on DT are from iPads. :-).
RE: Griping over an American company
4/8/2013 6:37:22 AM
JSON, you look like yet another one of Tony's trolling accounts...
As long as Apple continues to be a closed Software+Hardware vendor it will be Apple vs everyone else.
Just happens that Samsung is the highest selling Android smartphone maker. I saw it mentioned in this thread that 3 out of 4 carriers carry iPhones. Gee, really? LOL! Bit of misinformation there since I have yet to see a carrier that doesn't carry iPhones. That guesstimate didn't come from me.
I will put it to you that every single carrier out there carries Android phones of some sort and that 99% of
will carry at least one Samsung phone model.
Samsung, for being not being a hardware + software, "my way or the highway" vendor does pretty damn good in comparison to Apple. Now put all those Android-based hardware vendors together and you will find 3 Android phones selling for each iPhone.
I don't care that my Sammy GS3 has a plastic back cover. I can pop that off and swap out the battery (and replace it with one having 3 times the capacity) any time I want. I like having a 32GB MicroSD card to store all my shit on. And I like that when the Sammy SG4s come out I can pop that card out and have all my shit instantly available on that new GS4.
Isn't having a phone with an open architecture from the software on up grand? I wouldn't trade that for an Apple sealed up in an aluminum box for the world. No thanks!
"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer
USPTO Deals Second Strong Blow to Apple's Effort to Patent Bouncing Animations
April 4, 2013, 4:19 PM
Report: 6.3" Samsung Galaxy "Mega" Smartphone Inbound
April 3, 2013, 9:47 AM
Apple CEO Tim Cook Apologizes Again -- This Time for Warranties in China
April 1, 2013, 2:47 PM
Samsung Planning to Release a Smart Watch
March 19, 2013, 10:42 AM
Galaxy S IV Smartphone Launches in NYC
March 14, 2013, 7:15 PM
iLate: CEO Tim Cook Says Apple Watch Will Ship in April
January 28, 2015, 3:03 PM
Amazon's Fire Sale on Fire Phone Steps up in UK w/ 1-Day Sale @ $150 Unlocked
January 28, 2015, 11:53 AM
Apple Sees Record Profit of $18 Billion, Sells 74.5 Million iPhones in Q1 FY2015
January 27, 2015, 6:01 PM
Apple Might Miss High-End of Analyst Estimates, Microsoft Earnings Hint
January 27, 2015, 3:14 PM
Microsoft Smartphone Sales Up 28 Percent as Lumia Budget Models Gain Ground
January 27, 2015, 8:30 AM
Quick Note: Special 20th Anniversary PlayStation 4 Raises $128,000 for Charity
January 26, 2015, 4:14 PM
Most Popular Articles
Under the Hood: How DirectX 11.3 and 12 Will Supercharge Windows 10 Gaming
January 23, 2015, 12:34 PM
2016 Cadillac CTS-V Packs 640 hp Punch with 200 mph Reach
January 23, 2015, 3:25 PM
Microsoft Shows Off Latest Windows 10 Build, Preps it for Next Week Release
January 21, 2015, 2:57 PM
Google Fixes Homophobic "Bug" in its Translator
January 27, 2015, 2:31 PM
Will Google Become America's Fifth Major Carrier?
January 22, 2015, 12:42 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information