Samsung estimates Q4 2012 record profit powered by growing sales of smartphones
Samsung Electronics has announced it expects to make a record profit for the last quarter of 2012, powered by growing sales of its smartphones.
It has estimated an operating profit of 8.8 trillion won ($8.3 billion) for the quarter, a 90% jump from the same period a year earlier.
That would make it the fifth quarter in a row of record profits for Samsung.
The success of its Galaxy smartphones helped Samsung overtake Nokia as the world’s biggest phone maker last year.
Analysts said that given the popularity of its smartphones, the South Korean firm was likely to see its profits grow further in the coming months.
“Not only are their smartphone sales growing, they have also learned how to make a good profit on those sales,” said James Rooney, chairman of Market Force Company, an advisory firm based in Seoul.
“Given these factors, this streak of record breaking quarters is likely to continue for a while,” he added.
One of the key drivers of Samsung’s smartphone sales in recent months has been its Galaxy S3 model.
However, the phone is facing increased competition, not least from rival Apple, which launched its iPhone 5 in September last year.
Other rivals, such as Nokia and HTC, have also launched new handsets powered by Windows Phone 8, in an attempt to increase their market share.
At the same time, there are also concerns that the pace of growth of sales that Samsung has seen in recent quarters could slow in the coming months.
“Investors are a bit concerned that Samsung’s momentum may slow in the first half after posting a series of record profits,” said Kim Sung-Soo a fund manager at LS Asset Management.
“The smartphone market is unlikely to sustain its strong growth, as advanced markets are nearing saturation,” he explained.
Kim Sung-Soo added that a slowdown in the smartphone division may hurt Samsung as other parts of its business, such as manufacturing memory chips and televisions, have already been impacted by a contraction in global demand.
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