Analysts: Samsung likely to pass Apple in Q3

Samsung released its third-quarter profit estimates that analysts said show significant gains in its mobile phone business. Samsung's success in the third quarter, coupled with Apple's (NASDAQ:AAPL) delay of sales of its new iPhone 4S to the fourth quarter, likely will push Samsung past Apple in the world's ranking of smartphone vendors by volumes in the third quarter.

In the second quarter, Apple squeaked past Nokia (NYSE:NOK) and Samsung to become the world's largest seller of smartphones. Apple shipped 20.3 million iPhones during the second quarter, compared with Samsung's estimated 19.2 million smartphones and Nokia's 16.7 million.

However, Apple won't begin selling its new iPhone 4S until later this month, and Samsung in the third quarter said it expects to report operating profits of $3.6 billion--far surpassing analysts' expectations, according to multiple reports. Though Samsung didn't detail its third-quarter performance by business segment, analysts attributed the pop in Samsung's profits to largely to shipments of its smartphones--driven by the company's flagship Galaxy S II Android phone--as well as shipments of its tablets. Thus, Samsung is expected to pass Apple in the third quarter as the world's largest smartphone vendor since Apple won't begin selling its new iPhone until the fourth quarter.

"I'm quite amazed," Lee Seung Woo, an analyst at Shinyoung Securities Co., told Bloomberg. "It seems like there was a big surprise on the smartphone side" for Samsung.

Though Samsung is expected to pass Apple (both Apple and Samsung will report detailed third-quarter results later this month) clouds are forming over Samsung's fourth quarter and 2012. Perhaps most importantly, Samsung in the fourth quarter will face competition from Apple's new iPhone 4S. Further, the company's chips and display divisions could face problems if Apple begins transitioning away from using Samsung components. Apple is Samsung's biggest customer of handset components, and that relationship could be affected by the contentious patent battle the two companies are locked in in courtrooms across the globe.

For more:
- see this Samsung release
- see this Bloomberg article
- see this Reuters article
- see this WSJ article (sub. req.)

Special Report: Wireless in the third quarter of 2011

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