Samsung soars on smartphones

Samsung stamped its authority on the smartphone market in 4Q11, with strong shipments of high-end devices contributing heavily to a 580 billion Won (€393 million) rise in net profit.
 
The South Korean vendor reported net income of 4 trillion Won for the quarter, up from 3.42 trillion Won in 4Q10, as sales grew across the board. The firm’s telecom business recorded a 79% year-on-year increase in operating profit to 2.64 trillion Won on the back of the higher handset shipments, and growth in sales of LTE infrastructure domestically and in the US.
 
Samsung’s semiconductor business also enjoyed a bumper quarter, with operating profit up 29% to 2.31 trillion Won. However, the division’s full year operating profit fell 27% to 7.34 trillion Won. Telecoms grew 90% year-on-year to 8.27 trillion Won.
 
The Korean firm expects smartphone sales to grow at least 30% in 2012, but notes feature phone shipments are set to slow. It also predicts that fierce competition in smartphone pricing will continue through the year, particularly as more mass-market units ship to emerging markets.
 
Perhaps crucially, the vendor predicts a tough first quarter. That could be bad news for Nokia, which slipped further behind its two major smartphone rivals (Samsung and Apple) during 4Q11.
 
Taurus Investment Securities analyst Kim Hyung Sik predicts Samsung will surpass Nokia as the world’s largest mobile phone manufacturer by the year-end, Bloomberg reports.

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