KOREA: Smartphone success drives Samsung to record sales and profits

Samsung has announced its July-September sales and profits figures – and they're huge, with a major proportion of the success being down to the performance of its smartphones, including the Galaxy S3 (above).

Over the past three months the company had sales of KRW52tn, or just under £30bn, up over 9% on the previous quarter, while operating profit was up over 20% to break the record set in the April-Jun quarter.

Then Samsung showed profit of KRW6.7tn, but in July-September the figure was KRW8.1tn, or just over £4.5bn. That's almost half of all operating profit shown by Korea's top ten companies in the quarter.

Much of that success is down to soaring sales of the company's smartphone handsets: its IT and Mobile Communication division had sales estimated at KRW30tn and contributed KRW5tn of that operating profit.

Or to put it another way, phones accounted for over 60% of all Samsung sales in the past three months, and about the same proportion of its profits.

The Galaxy range has made the the biggest contribution to that success, the S3 selling more than 20m units in little over three months since its launch. And while it's possible the company may beat its projection of KRW7.1tn of operating profit in the final quarter of this year, increased competition from the newly-launched Apple iPhone 5 may prove the deciding factor.

Nevertheless Samsung is bullish about the performance of its phone division in 2013: it expects an operating profit of KRW17tn (just over £9.5bn) from the division for the whole of 2012, and is confident it can boost that figure to KRW20tn (almost £11.25bn) next year.

That will bring the profit from the division close to the KRW25tn operating profit the company as whole is expected to achieve this year.

According to senior Samsung sources speaking to the Korean financial press, it expects to do that by hanging on to its market-leadership in smartphones, despite the renewed competition from Apple, with a 'new strategic smartphone line-up'.

This new line-up is likely to include the much-rumoured Galaxy S3 Mini, expected to be announced this week.

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Andrew has written about audio and video products for the past 20+ years, and been a consumer journalist for more than 30 years, starting his career on camera magazines. Andrew has contributed to titles including What Hi-Fi?, GramophoneJazzwise and Hi-Fi CriticHi-Fi News & Record Review and Hi-Fi Choice. I’ve also written for a number of non-specialist and overseas magazines.