Galaxy drives up profits for SamsungSmartphone sales fuel massive multi-billion dollar investmentsBy Brid-Aine Parnell â¢ Get more from this authorPosted in Enterprise, 27th January 2012 13:01Â GMTSamsung’s smartphones have helped drive the company to an operating profit of â©5.3 trillion ($4.7bn) in the fourth quarter of last year.The Korean chaebol’s mobile line, particularly its Galaxy smartphones, saw Samsung’s mobile business grow profits to $7.4bn over the whole year, up 90 per cent from 2010.Samsung has gotten used to being compared to Apple as the tech giants fight it out in the mobile sector quarter by quarter, bludgeon each other in the courts over patents and release arguably the top smartphones for the competing operating systems of iOS and Android.However, despite the enormous growth in Samsung’s profits, they’re a drop in the ocean compared to Apple’s recently released results.The fruity firm bagged a net profit of $13.06bn in its fiscal first quarter of 2012, which is comparable to Samsung’s fourth quarter as they both cover the period October 2011 to December 2011. In those months, Samsung’s net profit was $3.6bn.And although the Korean firm’s mobile division is soaring, its net income for the full year was $12.2bn, down 15 per cent from 2010. However, much of this was down to how much Samsung spent last year.The company has been working hard to revive its semiconductor and display businesses, suffering in the poor economic climate from a reduced appetite for PCs and tellies, as well as from shortages emanating from the flooding in Thailand last year.Samsung splurged $20.5bn in investments last year, including $11.6bn on the semiconductor business and $8.9bn on its display panel division.The company is taking its semiconductor unit in the direction of NAND chips, used in mobile devices and system LSIs, used in image sensors. In its display business, Samsung is working on tablet and smartphone displays as well as its 3D and LED TV panels.Samsung is going to spend another giant wad of cash this year, when it invests â©25 trillion ($22.3bn) in semiconductors and displays.
Semiconductors, including memory and system LSI, posted operating profit up 29 percent to KRW 2.31 trillion in the fourth quarter.
The company would only say that smartphone shipments increased 30 percent compared to the past quarter, which analysts interviewed by Reuters interpreted as around 36 million units, just shy of the 37 million iPhones that Apple (NSDQ: AAPL) sold during its first fiscal quarter.
Ironically, Apple is one of its biggest customers, buying components for its Jesus-mobes and iPads from its rival.
Related storiesSamsung eyes enormofridges for see-through screens (27 January 2012)Samsung outsold Apple in world smartphone arena (27 January 2012)German court shoots down patent gripe against Apple (20 January 2012).
Apple’s share of the smartphone market has more than doubled in China since the first quarter of 2010, but Samsung, which recently passed Apple as the world’s top smartphone maker, has meanwhile seen its share more than quadruple.
Victor Arrington is a business journalist based in Orange, California. Victor has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Victor spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.