Samsung profits surge 79% boosted by smartphone sales

[kyrax12]

It has forecast an operating profit of 6.7tn won ($5.9bn; £3.8bn) for the period, its highest quarterly profit since 2008.

Its fortunes contrast with its Taiwanese rival HTC, which has reported a 58% fall in three-month profits.

Disappointing European sales and problems with US customs were blamed.

Samsung overtook Nokia as the world's biggest maker of mobile phones earlier this year.

Analysts said its profits could rise even further in the coming months.

"Earnings will be stronger in the current quarter, as sales of the high-end Galaxy S III will increase dramatically and drive the telecom division's earnings to above 5tn won," said Nho Geun-Chang, an analyst with HMC Investment Securities.

"We estimate shipments of the Galaxy S III will reach 19 million units in the third quarter."

This just really shows how much potential Samsung has in the mobile phone market. Apple better step up their game with the Iphone 5.
http://www.bbc.co.uk/news/business-18732714

 

[jpiniero]

If Apple only sold 19M iPhones last quarter, I think the stock would fall 50%, heh. Still, it's pretty clear that Samsung has seized control of the Android smartphone market. I think it could become a two horse race in the not too distant future. It's not like any of the other ones are making any money.

 

[shabby]

Apple better step up their game with better lawyers.

Fixed.

 

[Fingolfin269]

Not sure this is more of a sign against Apple or a sign against other Android manufacturers. The article even somewhat spells this out by pointing towards a 58% hit taken by HTC.

 

[tfinch2]

Not sure this is more of a sign against Apple or a sign against other Android manufacturers. The article even somewhat spells this out by pointing towards a 58% hit taken by HTC.

It doesn't surprise me that HTC took such a huge hit. Their phones were nowhere near the S2 in terms of quality and value. I expect them to pick things up with the One line, which probably did nothing for their last quarter numbers.

 

[Mopetar]

Not sure this is more of a sign against Apple or a sign against other Android manufacturers. The article even somewhat spells this out by pointing towards a 58% hit taken by HTC.

We'll probably have a better idea when Apple releases their financials. Their market share has been relatively stable or increasing slightly in most markets, so it's likely that Samsung's gain is other Android manufacturer's loss. I suppose that both might also be eating what remains of Windows Mobile, Palm OS, and BB OS out of the market, but those are getting to be so small that they hardly matter.

 

[MrX8503]

This just really shows how much potential Samsung has in the mobile phone market. Apple better step up their game with the Iphone 5.
http://www.bbc.co.uk/news/business-18732714

Considering Google lost market share during the 4S launch, I expect the same to happen again for the iPhone5. Its all the in between times where Apple loses leverage.

Doesn't Apple have the largest profits in the mobile space?

http://news.cnet.com/8301-13579_3-5...ks-up-75-percent-of-all-mobile-phone-profits/

 

[Kenmitch]

Considering Google lost market share during the 4S launch, I expect the same to happen again for the iPhone5. Its all the in between times where Apple loses leverage.

Doesn't Apple have the largest profits in the mobile space?

http://news.cnet.com/8301-13579_3-5...ks-up-75-percent-of-all-mobile-phone-profits/

Probably....But how many bailed out after the 4s was.anounced. If the 4" screen rumor is true I see more this go around.

The way Apple keeps its numbers climbing is by adding more carriers thus more potential for higher sales.....Guess they could add T-Mobile still in the US.

 

[Bateluer]

Apple numbers increase slightly around every iPhone launch, then dwindle the rest of the year. Android numbers tend to simply grow year round, since devices are launched year round. There's no drop off really.

Samsung's 80% increase in profits reflect why Apple is targeting everyone else with lawsuits, they cannot stand by while people chose to purchase superior products. The lawsuits are designed to remove that choice from the consumer. How many people would willingly go back to a dumb phone after owning a high end smartphone? Not many. With Android out of the way, that sends 90% market share back to Apple. Its as simple as that.

 

[Phokus]

I think Samsung's strategy on focusing on a flagship phone (the Samsung Galaxy line) is pretty smart. Sure they have other smartphones, but the Samsung Galaxy line is the one everyone salivates over.

 

[kyrax12]

Apple numbers increase slightly around every iPhone launch, then dwindle the rest of the year. Android numbers tend to simply grow year round, since devices are launched year round. There's no drop off really.

Samsung's 80% increase in profits reflect why Apple is targeting everyone else with lawsuits, they cannot stand by while people chose to purchase superior products. The lawsuits are designed to remove that choice from the consumer. How many people would willingly go back to a dumb phone after owning a high end smartphone? Not many. With Android out of the way, that sends 90% market share back to Apple. Its as simple as that.

So how well is Apple's monopoly in the smartphone market coming along?

 

[Mr. Pedantic]

Apple numbers increase slightly around every iPhone launch, then dwindle the rest of the year. Android numbers tend to simply grow year round, since devices are launched year round. There's no drop off really.

Samsung's 80% increase in profits reflect why Apple is targeting everyone else with lawsuits, they cannot stand by while people chose to purchase superior products. The lawsuits are designed to remove that choice from the consumer. How many people would willingly go back to a dumb phone after owning a high end smartphone? Not many. With Android out of the way, that sends 90% market share back to Apple. Its as simple as that.

So we should all buy Windows 8 phones to help Microsoft along in the mobile space? A third major player in the market would be interesting, to be honest.

 

[Mopetar]

Apple numbers increase slightly around every iPhone launch, then dwindle the rest of the year. Android numbers tend to simply grow year round, since devices are launched year round. There's no drop off really.

Actually, even Android is slowing somewhat, at least in the more major markets where the market overall is becoming more saturated. Globally it's still continuing on well as cheaper phones are finding their ways to new markets.

The lawsuits are designed to remove that choice from the consumer. . . . With Android out of the way, that sends 90% market share back to Apple. Its as simple as that.

A nice theory, but please point out any Apple patent that can completely block Android from the market. The simple fact is that such a patent does not exist. In every case where Apple has won in court, manufacturers were able to have a patch (or other work around) within a few weeks.

Apple doesn't even appear as though the want to shake down those companies for money, either. At best, they might succeed in having some features removed from Android, but nowhere near enough that it would make people consider Android phones "dumb". More realistically, Apple will only succeed in making sure that Android phones don't implement features in ways that violate Apple's patents.

Suggesting that Apple will somehow eliminate Android from the market just smacks of baseless fear-mongering. There's no logical support for such an argument, and it also fails to take into consideration a large number of other factors that would prevent Apple from gaining 90% market share.

If there's a company that actually stands to have a bigger negative impact on Android it's Microsoft. Currently, a large number of manufacturers pay Microsoft a royalty for every Android device shipped. Microsoft could conceivably use this position to offer Windows Phone licenses at a lower rate, incentivizing manufacturers to run Windows Phone on their devices. Even in that scenario, which is unlikely to occur for a different set of reasons, there's still little to stop Android from existing and maintaining a sizable market share.

 

[smartpatrol]

The smartphone market is kind of depressing. Apple utterly DOMINATES in terms of profit share. The only other one making any real money is Samsung. HTC is bringing in a tiny bit.

All the rest are bleeding money. Motorola, Nokia, RIM, Sony, LG, etc. are all losing money on smartphones. You have to wonder how much longer these companies will even bother competing in the smartphone market when there is no money to be made. It'll only get worse in the future once Amazon releases a low-cost, subsidized, high volume smartphone. We could easily see Apple and Samsung owning the high end, Amazon owning the low end, and no real room for anybody else.

I honestly think the scales will tip further in Apple's favor with the release of their next iPhone. If it has a 4" screen and LTE, that will eliminate the two biggest advantages that Android currently has. Apple could steal a large chunk of Android's market share that way.

 

[Bateluer]

So how well is Apple's monopoly in the smartphone market coming along?

What monopoly? They have slightly less than 1/3rd global market share. Hardly a monopoly, even if there were effective alternatives from elsewhere.

 

[mammador]

Apple has only released 1 phone in almost two years now. As Samsung has put out the SII, Galaxy Note and now SIII, little else can be expected. Samsung has become the sexy maker now, just as Apple was when Jobs was alive.

I think that Jobs' death has been an effect on Apple not launching phones. It's understandable, given he was the company in many respects. Whether the smartphone market will become a duopoly remains to be seen, but it's difficult to see how the other Android makers will fair in this scenario. I'm surprised at HTC's performance, but there has been no top phone since the Desire from them.

 

[Dari]

Samsung's numbers are suspect to me. Par for the course from a corrupt company. It's easy to boost profit when you don't pay your suppliers. With that said, the company is in a good position to leverage all its components to exploit the smartphone bonanza. They have memory, processors, screens, iPhone designs...

 

[jpeyton]

If it has a 4" screen and LTE, that will eliminate the two biggest advantages that Android currently has.

Android's biggest advantage is that it has a phone in every possible configuration at every possible price point on every carrier in the world. Flagship devices launch every 3-6 months.

Apple can launch a phone once every 12-16 months.

 

[smartpatrol]

Apple has only released 1 phone in almost two years now. As Samsung has put out the SII, Galaxy Note and now SIII, little else can be expected. Samsung has become the sexy maker now, just as Apple was when Jobs was alive.

I think that Jobs' death has been an effect on Apple not launching phones. It's understandable, given he was the company in many respects. Whether the smartphone market will become a duopoly remains to be seen, but it's difficult to see how the other Android makers will fair in this scenario. I'm surprised at HTC's performance, but there has been no top phone since the Desire from them.

Android's biggest advantage is that it has a phone in every possible configuration at every possible price point on every carrier in the world. Flagship devices launch every 3-6 months.

Apple can launch a phone once every 12-16 months.

Yup, Apple launches one great phone every 12-16 months. Yet it now has 73% of the smartphone profit share (source: http://arstechnica.com/business/201...handset-profits-as-smartphone-sales-shoot-up/ ). They're making nearly three times as much with iPhone as all of their competition combined.

Part of the reason for Apple's amazing success is they focus on a small number of really great products. Sure, they could try to stuff the market with smartphones in every possible price point and niche. They could make an iPhone Pro with a keyboard and enterprise/security features, an iPhone Mini, iPhone XL, a few cheapo plastic ones aimed at the low end.

Would that gain them some marketshare? Probably, at least in the short term. Would it lead to more profitability? Fat chance. Would it make them a more "sexy" company? HELL no. This is the strategy that all of Apple's competitors use, and look how it's working out for them. Apple is the most respected and valuable brand name in the world, and they got that way by <b>not being like every other commodity hardware manufacturer and cranking out as many "me too" products as they can</b>.

The "geek" attitude towards Apple has always been "if only they'd release exactly the products that I want, they would be more successful." Yet here they are, the most valuable and profitable company in existence, and they haven't once designed a product by asking "how do we give them what they're asking for?"

 

[Red Storm]

The "geek" attitude towards Apple has always been "if only they'd release exactly the products that I want, then I'd buy one."

Fixed that for you. Geeks - as well as the overwhelming majority of people - don't care about company profits.

 

[jpeyton]

TLDR

I don't own Apple stock, so I don't really care if their margins are higher than Samsung's, HTC's, Motorola's, etc.

Losing marketshare is HIGHLY important to Apple in the mobile space; only an idiot would think otherwise. If it wasn't, they wouldn't be suing every Android phone company in dozens of courtrooms worldwide.

 

[QueBert]

Android's biggest advantage is that it has a phone in every possible configuration at every possible price point on every carrier in the world. Flagship devices launch every 3-6 months.

Apple can launch a phone once every 12-16 months.

That's true, but at the same time it's also Android's biggest disadvantage too. I have bought about 100 apps since my Droid 1, I recently bought a Galaxy Note and about 12 of the apps won't run on it. When you get a brand new top of the line device and there are apps that ran on a 3 year old phone that won't run on your new one. That's somewhat of a problem, and as more and more new SoC's come out problems like I'm having are just going to multiple.

 

[mammador]

Yup, Apple launches one great phone every 12-16 months. Yet it now has 73% of the smartphone profit share (source: http://arstechnica.com/business/201...handset-profits-as-smartphone-sales-shoot-up/ ). They're making nearly three times as much with iPhone as all of their competition combined.

Part of the reason for Apple's amazing success is they focus on a small number of really great products. Sure, they could try to stuff the market with smartphones in every possible price point and niche. They could make an iPhone Pro with a keyboard and enterprise/security features, an iPhone Mini, iPhone XL, a few cheapo plastic ones aimed at the low end.

Would that gain them some marketshare? Probably, at least in the short term. Would it lead to more profitability? Fat chance. Would it make them a more "sexy" company? HELL no. This is the strategy that all of Apple's competitors use, and look how it's working out for them. Apple is the most respected and valuable brand name in the world, and they got that way by <b>not being like every other commodity hardware manufacturer and cranking out as many "me too" products as they can</b>.

The "geek" attitude towards Apple has always been "if only they'd release exactly the products that I want, they would be more successful." Yet here they are, the most valuable and profitable company in existence, and they haven't once designed a product by asking "how do we give them what they're asking for?"

Apple doesn't need to, since it specifically targets the high-end market. these market segments are enough for it to prosper.

One also has to account for sole handset sales. I'd imagine on handset bases, the iPhone is still the best selling handset.

 

[jpeyton]

Apple doesn't need to, since it specifically targets the high-end market. these market segments are enough for it to prosper.

That prosperity will be short-lived if they ignore market share. Jobs said as much back in 2004 when asked why Macs never gained mass market appeal even though they had a head start over Windows:

If that&#8217;s so, then why is the Mac market share, even after Apple&#8217;s recent revival, sputtering at a measly 5 percent? Jobs has a theory about that, too. Once a company devises a great product, he says, it has a monopoly in that realm, and concentrates less on innovation than protecting its turf. &#8220;The Mac user interface was a 10-year monopoly,&#8221; says Jobs. &#8220;Who ended up running the company? Sales guys. At the critical juncture in the late &#8217;80s, when they should have gone for market share, they went for profits. They made obscene profits for several years. And their products became mediocre. And then their monopoly ended with Windows 95. They behaved like a monopoly, and it came back to bite them, which always happens.&#8221;

It's happening all over again. iOS had a good head start over Android, but Google is going for the land grab, sacrificing hardware margins to lock potential customers into an ecosystem.

 

[Mopetar]

It's happening all over again. iOS had a good head start over Android, but Google is going for the land grab, sacrificing hardware margins to lock potential customers into an ecosystem.

We haven't seen what Microsoft's pricing will be yet, but they could come in surprisingly low and surprise a lot of people. Also there are enough rumors at this point that it's almost a certainty that Apple will have a smaller iPad, and they might release an entry-level model for around $200 as well. Amazon will probably refresh the Fire for the holidays and I wouldn't be surprised if they sell at a loss.

It's also hard to tell what percentage of the Android tablet market Google will capture. The entire market can't work on a model of no margins as the other hardware manufacturers won't put up with it and I don't know if Google would want to commit the money required to subsidize the entire Android tablet market.