In the war of Android versus iPhone, Samsung is taking no prisoners. Its Galaxy S II, which came out in May last year, surpassed 10 million units, selling faster than any other Samsung mobile device and overtaking iPhone sales in the third quarter of 2011, crowning Samsung as the world’s largest smartphone seller.
Demand for the device could not have come at a more opportune moment as profits slump at the firm’s chip and flat-screen panel businesses. As it stands, operating profits for the three months to December increased 73% to a record 5.2tn won ($4.5bn), trouncing analysts’ forecasts of between $3.5 and $4bn.
By the third quarter, Samsung had doubled market share, shipping 27.8 million units in the past three months. Sales for the quarter rose 12% to £4bn. Across the whole of 2011, Samsung sold an impressive 300 million handsets.
It's TV business isn't faring quite as well, alas. Global LCD TV shipments underperfomed by around five million units last year. But there may be a bright spot on the horizon for Samsung, after its acquisition of Sony's LCD-making business in December. It may have been a loss-making venture for Sony, but with Samsung's TV-making arm pulling in earnings of 170.5bn won this year, compared with a loss of 170bn won in 2010, the firm has proved it can turn a profit from the flagging TV trade.
Smartphone sales may be a key driver behind the latest set of bumper profits, but Samsung also secured a wedge of cash in the fourth quarter through the sale of its hard disk drive business to Seagate. Samsung trousered $1.38bn in cash and stock from the deal, which completed last month. This extra dosh explains the profit spike, but still leaves Samsung with a declining profit for the year, down 6.7% on 2010. Hence the 1.4% drop in Samsung’s share price as trading closed in Seoul last night. Sales, however, are still edging up: 2011 full-year revenues have increased 6.5% to over $142bn.