Samsung profits up almost 50% but predicts intensified smartphone demand
Samsung second quarter earnings out today, show it a force to be reckoned with, but predicts fierce mobile competition as rivals play catch up.
Samsung’s total sales rose to 57.4 trillion won for Q2 2013, marking an almost 10% jump from Q1. Sales in its mobile division, one of its biggest earners, rose 9%. Net profits rose almost 50% to 7.77 trillion won or $6.96 bn compared to the same time 2012.
However, its mobile unit took a hit – with profits down 3.5 percent compared to Q1 but up 52% compared to same time 2012, thanks to the release of its hero device Galaxy S4 and Note 8.0 phablet.
However, the world biggest phone maker noted smartphone demand in Q2 increased just “slightly” citing low single digit growth due to” weak seasonality”, as mobile penetration in developed markets peaks. However, it said growth remained steady for high-end smartphones.
The Galaxy S4 maker also predicts completion to intensify due to new products launches by rivals.
“As we go into a typically strong season for the IT industry, we expect earnings to continue to increase,” the Korean giant said.
“However, we cannot overlook delayed economic recovery in Europe and risks from increased competition for smartphones and other set products.”
Samsung arch rival Apple is tipped to be launching larger sized smartphones mimicking the larger displays of Samsung’s Galaxy line.
Samsung said demand for tablets fell in developed markets but increased in emerging markets.
Its massive Consumer Electronics division, which includes TVs grew 14%, posted an operating profit of 430 billion won
Samsung said TV demand grew only slightly citing weak seasonality and low demand in EU, although noted strong sales of premium TVs.
However, its financial statement pointed to alluded to successful launches of 60″+ ultra large-screen TV and UHD and its “expanded customer base.”