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Samsung rakes in record profits as HTC sales dive

Booming phone sales helped Koreans ward off PC chip chill

Surging smartphone sales have brought in record quarterly profits for Samsung, the world's biggest technology company by sales.

The South Korean firm made 5.2 trillion won ($4.5bn) in quarterly operating profits in the last quarter of 2011, according to its preliminary results posted today. It's a 73 per cent rise on the same time last year and up 22 per cent from Q3.

Samsung shifted an estimated 35 million smartphone units in the last three months of 2011, an increase of about a fifth on the 28 million sold in Q3. Top-end Android smartphone the Samsung Galaxy S II has sold well and 7-inch tablet the Galaxy Note has been successful in the tablet market.

The $1.4bn sale of Samsung's hard disk drive business to Seagate, finalised last month, has also inflated the quarterly earnings.

The boom in phone sales and demand for Samsung manufactured phone components has helped Samsung survive the chill in demand for PC memory chips, once the Korean company's core business.

Samsung surpassed Apple in smartphone sales in the last quarter, but watchers will have to wait until later this month – when Apple posts its results and Samsung releases its full figures – to determine how the two technology companies measure up.

Gloom in Taiwan

The picture was darker for another Asian phone-maker, HTC, the fourth biggest maker of smartphones. HTC's results, posted earlier today, showed their first quarterly drop in profits for two years, a dip worse than it anticipated when it revised down its investor predictions in November.

HTC's net profit in October-December was down 26 per cent to T$11.02bn ($364.64m), compared with T$14.8bn ($489.72m) a year earlier and T$18.68bn ($618.11m) in the previous quarter.

A strong start to 2011 meant that net profit for the full year of 2011 up 57 per cent from 2010 to T$62.05bn ($2.05bn), but there are concerns for the company's future in a highly competitive market. New quad-core LTE products to be released in February could grab back some market share for HTC, but like RIM and Nokia, the brand could end up crushed between Apple and Samsung. ®

Bootnote

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