Samsung cautious for 2013, despite stellar Q4 – Mobile World Live

Samsung cautious for 2013, despite stellar Q4

25 JAN 2013

Samsung announced impressive results for the fourth quarter of 2012, while at the same time warning that it is not set for an easy ride in the coming year.

The company’s Mobile Communications (handset) business generated quarterly revenue of KRW27.23 trillion (US$25.3 billion), compared with KRW17.18 trillion in the fourth quarter of 2011.

Looking forward it said that “the furious growth spurt seen in the global smartphone market last year is expected to be pacified by intensifying price competition compounded by a slew of new products”.

In the current quarter, demand for smartphones in developed countries is expected to decelerate, although “their emerging counterparts will see their markets escalate with the introduction of more affordable smartphones” throughout the year.

The company is also anticipating continued declines in its feature phone business.

Moving back to Q4, Samsung said its growth was “mainly driven by solid sales of Samsung’s Galaxy SIII and Note II” smartphones, which “beat the popularity of their predecessors with record sales in record time”.

The company noted gains from its “full lineup of entry- to mid-level  smartphones, expanded sales of tablet PCS and an increase in average selling price from the previous quarter”.

As usual, the company did not breakout details of its shipment volumes, although figures released by IDC today peg the company at 111.2 million units for the quarter, up 12.3 percent from 99 million units in the same period of 2011.

The company was the largest global device maker, with market share of 23 percent, compared with 17.9 percent for Nokia.

There were some less positive performances, as well. The company said that its network and IT-related activities were “stunted by heated pricing in the fourth quarter”. Sales of LTE technology continued to gain, however.

Growth in the mobile industry also helped stabilise its component business, which otherwise saw weak demand for products such as PC memory. It also noted struggles in its display panels business, as demand for products for notebooks and monitors was slow, while sales of television and smartphone/tablet screens “prevented wider losses”.

On a group level, it reported a profit of KRW7.04 trillion, compared with KRW4.01 trillion in the prior-year period, on revenue of KRW56.06 trillion, up from KRW47.3 trillion.

For the full year, it saw a group operating profit of KRW29.05 trillion, on revenue of KRW201.10 trillion.

Looking forward, it said its capital expenditure in 2013 will be “similar to that of 2012’s”. The weakening global economy and “looming market uncertainties” are anticipated to weigh on its performance and investment plans, but Samsung said that it “will respond to the market’s ebb and flow with a capex plan that is flexible in manner”.

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Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

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