Samsung slumps despite telecom success

A strong showing from Samsung’s telecoms business in 1Q11 wasn’t enough to prevent group profits plummeting 30% year-on-year.
The Korean vendor saw profits fall to 2.78 trillion Won (€1.7 billion) as growing costs offset a 7% rise in revenues during the period, and all but one of its divisions recorded a fall in operating profit.
Telecoms was the business unit that bucked the trend, growing operating profit 1.2% to 1.43 trillion Won on the back of a 9% rise in handset shipments to 70 million units, and a stable performance by the networks division, which profited on LTE and 3G upgrade contracts.
Samsung states the growth in handset sales reflects an improved product mix, noting that sales of mass market models including the Galaxy Ace, Galaxy Mini and Wave 525 helped boost overall shipments during the quarter. Smartphone sales were also up during the period, accounting for 18% of all devices shipped.
Mobile applications were also a bright light at the firm’s semiconductor business during the quarter, with solid demand for mobile and server DRAM offsetting lower demand for PCs. Smartphones and tablets fuelled steady sales of NAND and System LSI kit.