Samsung predicts Galactic Q3 profits

Samsung reckons it will make 12% more profit in Q3 this year than in Q2. More fuel for its spat with Apple then...

by Andrew Saunders
Last Updated: 06 Jan 2012
Samsung Electronics - the high-tech arm of the eponymous South Korean chaebol that incongruously enough started life as a noodle bar - appears to be feeling bullish. Only a day after the untimely death of Apple founder Steve Jobs was announced, the firm announced that its consolidated Q3 operating profit will be 12% higher than the figure for Q2 - $3.5bn compared to $3.1bn (that’s 4.2tn won to 3.75tn won if you prefer your currency domestic). That’s an awful lot of Kimchi however you slice it.

A pretty solid effort given the current global economic woes, and it’s largely down to the runaway success of its latest Galaxy series of Android smartphones. As of the end of September, no fewer than 10m top of the range Galaxy SII’s had been shipped, up from 5m only eight weeks earlier. Sales are up no less than 520% annually, and in Q3 alone Samsung shifted 19.2m smartphones to arch-rival Apple’s 20.3m. With a market share of 17.5% Samsung is now officially number 2 in the smartphone market, ahead of Nokia and a mere 1% behind Cupertino’s finest.

Those numbers just go to show how quickly fortunes can change in this business, and also go someway to explaining why the patent war between Apple and Samsung has suddenly notched up a gear. Samsung clearly has Apple’s reigning iPhone in its sights, while Apple for its part has no intention of ceding the top spot without a fight. The US firm has obtained injunctions preventing the sale of some Samsung products in German and the Netherlands (with a verdict pending in Australia) - in reply Samsung has announced its intention to seek similar constraints on the new iPhone4S in Italy and France.

Talking of the iPhone4S - launched on Tuesday - it appears to be an interim model unlikely to open up the gap between the two rivals again on its own. In the meantime Samsung has clearly sniffed an opportunity to take a big bite out of Apple and is not going to be put off. And while we hate to say it, the fact of Steve Jobs sad demise is unlikely to make the task any harder for Samsung. The loss of such an influential figure is bound to have a destabilising effect on Apple.

It’s even possible that the era of iDomination in the smartphone market is drawing to a close - Android powered phones are now outselling iOS models by 2 to 1, so the ball is clearly in Apple’s court.  The iPhone 5 can’t arrive soon enough for the US firm, and it will need to be an absolute knockout, to boot. Otherwise Samsung could easily be the world leader in smartphones by the end of the year. 

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