Samsung profits soar on phones, tablets; high hopes for Galaxy S4

The Korean electronics behemoth said profits increased 42 percent in the first quarter from a year ago

By Jay Alabaster, IDG News Service |  

Samsung Electronics said its Galaxy S3 and Note 2 helped it to defy a shrinking smartphone market in the first quarter, boosting its overall profits by 42 percent from a year ago.

The company said Friday its net profit was a record 7.15 trillion won (US$6.4 billion) in the period, up from 5.05 trillion won in 2012. That beat its even performance from the fourth quarter of last year, during the lucrative holiday shopping season. Overall sales were up 17 percent to 52.87 trillion won.

The company said global smartphone demand declined slightly in the January to March quarter, but its core products allowed it to increase market share. Samsung said it expects the Galaxy S4, which went on sale today in South Korea, to outperform its predecessor.

"Our company plans to focus on increasing smartphone shipments with the launch of our new flagship smartphone, the Galaxy S4," said Hyunjoon Kim, vice president of Samsung's mobile division. "We are working hard to make the Galaxy S4 an even greater success than the Galaxy S3."

The company aims to sell 10 million units of the S4 each month, and has already received that number in pre-orders for the device, according to Korean news reports. The smartphone features a 4.99-inch screen, quad-core processor and a host of advanced hardware features including wireless charging and even a barometer.

Some carriers, including T-Mobile in the U.S., have had to postpone their launch of the device due to supply delays. Samsung said Friday that there had been "slight delays" in supply because the company was surprised by global demand for the phone, but they will be "addressed very shortly."

Samsung is a dominant global manufacturer of memory chips, display panels and other components, but the majority of the company's profits now come from its smartphones and tablets. Samsung said that in the first quarter it generated 74 percent of operating profit in its mobile division, led by high-end and high-margin products like the Galaxy S3, Note 2, and Tab.

The world's largest mobile phone maker is also strong in mid and low-range smartphones, and said it will continue to aggressively compete in all segments.

Sales and profits fell in its consumer electronics division, which includes flat panel TVs, from a year ago. Profits nearly doubled in semiconductors, as it sold more high-end DRAM and NAND flash components.

Samsung said it is working on phones with flexible displays, but declined to provide any hints as to a specific launch date.

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