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Samsung posts record net profit on smartphone sales

Samsung Electronics has reported record profits in the three months to September, led by strong sales of its Galaxy range of smartphones.

Net profit was 6.5tn won ($5.9bn; £3.7bn), a 91% jump from a year earlier.

Strong demand and improved profitability at its display panel unit also boosted earnings.

However, increased competition and its legal tussles with Apple have raised concerns over its future performance.

“There are concerns that Samsung’s earnings would peak this year,” said Lee Sun-Tae an analyst at NH Investment & Securities.

‘Not sexy enough’

While Samsung has enjoyed tremendous success with its Galaxy range of smartphones, other manufacturers have been releasing new models, crowding the market space.

Last month, its biggest rival Apple launched the latest version of its iPhone.

Meanwhile, HTC and Nokia have also introduced new models powered by Windows 8, as the two firms look to regain some the market share they have lost in recent times.

Analysts said that increased competition means that firms may have to lower their prices to attract buyers as well as spend more on their marketing campaigns – which will dent their profit margins.

Samsung, which derives the bulk of its earnings from smartphone sales, is likely to feel the affect of any such moves.

“It’ll be difficult for Samsung to maintain such a high profit margin from handsets as the market gets crowded,” said Nam Dae-Jong, of Hana Daetoo Securities.  Read More

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Posted on October 25, 2012, in #technology and tagged , , , , , , . Bookmark the permalink. Leave a comment.

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