Samsung Electronics bounced back from a year-ago loss partially due to a sharp uptick in handset shipments in the fourth quarter, a rising tide that aided many of the rest of the firm's rivals in the mobile phone market.
The electronics conglomerate reported a $2.6 billion profit for the quarter, a strong showing after a $14.4 million loss in the fourth quarter of 2008, which was its first quarterly loss since it started reporting quarterly earnings in 2000.
Samsung's handset unit reported a record number of handset shipments in the quarter--68.8 million. That was up 31 percent from the fourth quarter of 2008, when it shipped 53 million units, and up from the record 60.2 million units it reported in the third quarter. The handset unit had an operating profit margin of 8.3 percent, up from 7.7 percent in the third quarter and 2 percent in the fourth quarter last year. The average selling price of Samsung's handsets fell to $115, down 4 percent from the year-ago period.
According to IDC, Samsung's global handset market share in the fourth quarter reached 21.1 percent, up from the 18.1 percent the research firm recorded for Samsung in the year-ago period. Samsung is a distant second to Nokia in terms of global handset market share (Nokia commanded 39 percent of the market in the period), though it sits far ahead of No. 3 handset player--and South Korean rival--LG. IDC said LG's market share in the fourth quarter clocked in at 10.4 percent.
"The company capitalized on growing interest in converged mobile devices with its Omnia2 while addressing end-user demand for touchscreen and quick-messaging devices within developed markets," IDC wrote of Samsung's performance in the quarter. "In emerging markets, Samsung's attention to local market tastes and extended distribution channels helped build its presence. Despite its heady growth, the company fell further behind market leader Nokia while distancing itself ahead of LG Electronics."
For the coming year, Samsung said it would continue to try to diversify its smartphone lineup by introducing more Android devices and those running its own OS, bada. Samsung said it expects its market share to continue to rise, and forecast its handset margins to hit double-digit figures. Like Nokia, Samsung predicted that the overall handset market would rise 10 percent in 2010 compared with last year, but said first quarter demand would decline due to seasonal factors.
For more:
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see how Samsung ranked in the fourth quarter
- see this Q4 earnings page
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