Samsung Electronics Co. can surprise. And it has surprised again with its record quarterly profits exceeding analysts’ expectations as the smartphone bonanza continues. No doubt that the South Korean electronics manufacturer witnessed these strong results as strong sales of its Galaxy models indeed offset weak demand for the company's TVs. It seems that Samsung Electronics Co. will enjoy maybe even stronger results in the upcoming months as its new Galaxy S4 smartphone is expected to strengthen the company's presence in the US market.
Quarterly results astonishingly good
On the 26th of April, the South Korean manufacturer issued its results for the quarter ended March, indicating that its net income surged to staggering 7.15 trillion won (around $6.4 billion), compared to slightly over 5 trillion won recorded the same period a year earlier. The net profit was far above analysts’ estimates of 6.7 trillion won.
Undeniably, Apple Inc., the biggest rival of Samsung Electronics Co., cannot take pride in its results as it did inform that it had recorded a surprising decline in its quarterly profits for the first time in 10 years.
Great figures of the South Korean giant were mainly driven by its mobile division which offset slowing demand for TVs. Samsung Electronics Co. saw its quarterly profits in the mobile division jump approximately 55 percent to slightly over 6.5 trillion won on a year-on-year basis. More important, the South Korean electronics giant underlined that the mobile division generated around 75 percent of the company’s total profit.
Even though the South Korean manufacturer does not share information on smartphone sales figures, analysts have estimated that it sold between up to staggering 70 million smartphones in the three-month period. This is far above the figures reported by Apple Inc. on the 23rd of April when the iconic iPhone maker informed that its sold almost 37.5 million smartphones in the quarter ended March.
Analysts note that Samsung Electronics Co. has a simple recipe for success as it basically offers a wider range of smartphones in comparison to its US-based rival. Therefore it has a bigger market share as it has also won hearts of clients from emerging markets. However, the company is fully aware that the competition will be fiercer in emerging markets. Robert Yi, head of investor relations at Samsung Electronics Co., warned: "We may experience stiffer competition in the mobile business due to expansion of the mid-to-low end smartphone market, " indicating that the company was aware of future challenges.
Samsung conquers the US with Galaxy S4
On the 27th of April, Samsung Electronics Co. is due to launch its much-anticipated Galaxy S4 which is said to be a hit also in the United States. The release of its new flagship smartphone is aimed at winning a bigger market share in the US which is the Apple Inc.’s home market. The fact is that Samsung Electronics Co. aspires to snap the Apple Inc.’s preferential position in the US, thus it has recently announced the launch of its mini stores in Best Buy.
With its launch of the Galaxy S4, new mini stores, omnipresent advertisement, Samsung Electronics Co. is simply attacking the position of Apple Inc. The attack is even simpler as Apple Inc. is expected to roll out its new devices in autumn. That’s a lot of time to capture a bigger share in the US market.