Samsung Scores $8.3 Billion Profit, Thanks to Galaxy Phones

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Samsung galaxy Note 2-2

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Samsung is having one heck of a time. Thanks to the very successful Galaxy range of smartphones, Samsung reportedly earned a quarterly profit of $8.3 billion. In fact, the demand for flat screen displays which Samsung makes has also soared with even rivals Apple using them.

Samsung has outpaced Apple – its biggest rival and biggest customer – despite the U.S. firm’s launch of the latest iPhone 5, with sales momentum boosted by its Galaxy Note II phone-cum-tablet, or ‘phablet’, in the fourth quarter. IPhone 5 sales were a little below expectations, analysts said.

I guess the winning point for Samsung is that, while Apple launched just one smartphone in a year, Samsung went ahead and launched 37 different smartphones tweaked to user requirements in different parts of the globe. By comparison, Taiwan’s HTC Corp released 18 models, Nokia 9 and LG Electronics 24.

HTC on Monday said its fourth-quarter profit slumped more than 90 percent as its sales continue to trail those of the Galaxy range and the iPhone.

The Samsung Galaxy S IV is expected to be launched in a few months from now. While analysts believe that with no new launches in between, sales might drop, but we think once the Galaxy S IV is launched, it will make up for any loss of sales, if at all, during this period.

“Samsung’s smartphone shipments are likely to grow even in a seasonally weak first quarter. The early launch of the Galaxy S IV would drive second-quarter growth momentum,” said BNP Paribas Securities analyst Peter Yu, who predicts Samsung’s 2013 operating profit will grow 25 percent to almost $35 billion.

Samsung is expected to increase its smartphone sales by more than a third this year, and widen its lead over Apple as it offers a broader range of mobile devices, said Neil Mawston, executive director at market researcher Strategy Analytics, which forecasts Samsung will sell 290 million smartphones this year, up from a projected 215 million in 2012.

Samsung said its October-December operating profit jumped 89 percent to 8.8 trillion won from a year ago, just ahead of a forecast for 8.7 trillion won by 16 analysts surveyed by Reuters. That is 8.6 percent higher than its previous record of 8.1 trillion won in July-September.