Smartphones set to fuel another record quarter for Samsung - Mobile World Live

Smartphones set to fuel another record quarter for Samsung

06 JUL 2012

Samsung has forecast record profits for its latest quarter on the back of strong smartphone sales – though the firm has hinted at pricing pressure in key markets such as Europe.

According to Reuters, the South Korean vendor said today that operating profit in Q2 is likely to jump 79 percent year-on-year to KRW6.7 trillion (US$5.9 billion) in line with an average forecast in a Reuters survey, and beating the previous record profit in Q1. Revenues are estimated at KRW47 trillion, just below a KRW50 trillion forecast. Samsung reports its official Q2 numbers later this month.

Profit from the mobile division is likely to have more than doubled to around KRW4.4 trillion from a year ago, with sales of around 50 million smartphones driven by the recent launch of the flagship Galaxy SIII.

"Our smartphones are flying off the shelves, with some outlets reporting 40 percent to 60 percent sales growth,” a Samsung source told Reuters.

But the source warned that Samsung would not be immune from the effects of the Eurozone crisis. "Europe is our biggest consumer electronics market and we may have to initiate cost cuts and product price increases should the euro fall further from the current level," the source said.

The euro has fallen around 5 percent against the Korean won since April, and about 8 percent in the past year, to two-year lows.

While the Galaxy SIII is expected to continue to register strong sales in the current quarter (Q3), it will face tough competition when the new iPhone launches later this year.

However, Reuters notes that this will also have an upside for Samsung as it will boost the firm's semiconductor earnings; Samsung is the sole producer of processing chips used to power the iPhone and iPad, and also supplies Apple with mobile memory chips, NAND flash and display screens.