Samsung Q2 Profits Up 47.5%, But Operating Profit At Its Mobile Division Slows

samsung-logo

As the worldwide smartphone market slows, Samsung’s second-quarter earnings showed that it is beginning to feel the pressure despite being the world’s top smartphone vendor.

Samsung said its Q2 2013 operating profit increased 47.5% to $8.5 billion, in line with the company’s own estimate. Operating profit at its mobile division, which accounts for two-thirds of the company’s revenue and is its biggest earnings driver, rose 52% to 6.23 trillion won ($5.6 billion), but fell 3.5% from the previous quarter.

The reporting period included the launch of the Galaxy S4, Samsung’s flagship phone and its main rival to the iPhone. One month after the Galaxy S4 s launch, Samsung said it’d hit a record 10 million channel sales, but the Korean tech giant is under the same challenges as Apple thanks to a slowing global smartphone market and shrinking margins. Earlier this week, Apple reported weaker international sales, due in large part to a dramatic revenue plunge in China.

Samsung said that smartphone sales will continue to be slower in the third quarter.

“Entering into a typically strong season for the IT industry, we expect earnings to continue to increase,” said Samsung head of investor relations Robert Yi in a statement. “However, we cannot overlook delayed economic recovery in Europe and risks from increased competition for smartphone and other set products.”

Asian Mobile Makers Squeeze Apple’s Global Smartphone Share To Its Lowest For 3-Years In Record 230M Unit Q2

iphone4 - profile02

More proof, if proof were needed, that Apple needs a low cost iPhone to get its smartphone momentum mojo back: Cupertino’s share of the global smartphone market fell to its lowest for three years in Q2, according to Strategy Analytics, with just 31.2 million iPhones shipped in the quarter and Apple’s second place ranking declining to a 14% market share – this despite the overall smartphone market growing 47% annually to reach a record 230 million units shipped.

“The current iPhone portfolio is under-performing and Apple is at risk of being trapped in a pincer movement between rival 3-inch Android models at the low-end and 5-inch Android models at the high-end,” said Neil Mawston, Executive Director at Strategy Analytics, in a statement.

Mawston told TechCrunch it’s not just a low cost iPhone that Apple needs to return to growth, although he agrees that is a requirement for Apple to drive extra volume. Cupertino’s top priority should be a new type of flagship to compete with Samsung’s phablets, he said.

“Apple’s first priority should be a premium-tier phablet with a 5-inch screen because that is where the largest new revenue pool is located,” he said via email. “Apple is losing profit share to Samsung partly because of a lack of presence in the phablet segment. Apple’s second priority should be a lower-cost iPhone to win back some of the customers it is losing to cheaper Android models in Asia, Africa and Latin America.”

“A 5-inch iPhone would generate extra value for Apple, while a cheaper iPhone would deliver extra volume,” he added.

Overall, the analyst said smartphone market growth is being driven by demand for 4G handsets in developed markets such as the U.S. and 3G devices in emerging markets such as India. Asian mobile makers, who predominately use Google’s Android OS, are now clearly dominating the surging smartphone market, with Samsung still in kingpin position – shipping 76 million devices in Q2 to capture one-third of all smartphone volumes worldwide in the quarter – and LG, ZTE and Huawei in third, fourth and fifth place respectively.

The analyst described LG as a “star performer”, with its global shipments doubling year-over-year to hit 12.1 million units in Q2 to take a 5% share. “The popular Optimus and Nexus models have been the main drivers of LG’s success. If LG can expand its retail presence and marketing in major countries such as the US or China, LG could quietly start to challenge Apple for second position,” Analyst Linda Sui added in a statement.

Chinese mobile maker ZTE also took a 5% share in the quarter, shipping a record 11.5 million smartphones to take fourth place for the first time, while Huawei shipped 11.1 million handsets to also grab 5% and take fifth.

Samsung Wave 3 launches around the world

If you like Samsung smartphones with alternative operating systems you might want to listen up with the Wave 3 smartphone launching globally. The Wave 3 is a nice looking smartphone that runs the Samsung bada OS. We were hands on with the Wave 3 back in early September.

Samsung calls the Wave 3 smartphone its flagship offering and it has a 4-inch WVGA super AMOLED screen. The Wave 3 also runs a 1.4GHz processor and has a 5MP rear camera with autofocus and a LED flash along with a VGA resolution front camera. It operates on networks that will let it work in countries around the world.

The Wave 3 runs BADA 2.0 and as of today, it is available in Germany, Italy, Russia, as well as the French market it first launched in. Samsung notes the smartphone will come to other countries later this year. There is barely a month left in this year so those other locations will have to come soon. We also heard in September that Bada would go open source in 2012.

IDC: Apple, Samsung lose smartphone market share as Lenovo and others see greater growth

162767334 520x245 IDC: Apple, Samsung lose smartphone market share as Lenovo and others see greater growth

Apple and Samsung have both reported their financials for Q2 2013 so, as is customary, analyst firms are now putting out their estimates for the quarter. IDC is out of the blocks, noting that Samsung and Apple remain the market leaders but greater growth is coming from lesser companies.

The research firm estimates that Samsung – which hasn’t provided figures publicly since Q3 2011 – shipped 72.4 million smartphones during the quarter. That number is 44 percent higher than the estimate one year previous, but IDC says Samsung’s share of the market has receded slightly, going from 32.2 percent last year to 30.4 percent in Q2 2013.

Looking at things quarter-by-quarter, the Galaxy S4 launch pushed Samsung’s sales total up by 1.7 million units over its Q1 2013 figure. Its share of market is also down 2.4 percent on the previous quarter.

Apple’s 31.2 million shipments (which were actually sales) represent a 13.1 percent share of the market, which is down on 16.6 percent in Q2 2012 even though its shipments grew by 20 percent over the 12-month period. The US firm saw market share drop from 17.3 percent in the previous quarter.

Indeed, LG, Lenovo and ZTE – which round out the top five – each enjoyed greater year-on-year and quarterly growth than either Apple or Samsung.

LG’s record haul of 12.1 million smartphone shipments represented a 130 percent year-on-year improvement, which IDC estimates to have grown its market share from 3.1 percent to 4.7 percent.

Lenovo is back in the top five after a six month absence. The Chinese firm charted 130.6 percent year-on-year shipment growth, the highest of any top-5 vendor, after shipping 11.3 million devices for an estimated 4.7 percent market share. Fellow Chinese phone-maker ZTE saw its shipments jump 57.8 percent to 10.1 million units, or 4.2 percent market share, according to IDC.

Nokia, RIM, HTC, Sony and the rest of the competition are bundled into ‘others’, a category that accounts for 42 percent of IDC’s Q2 2013 shipment estimates.

idc figs q2 2013 IDC: Apple, Samsung lose smartphone market share as Lenovo and others see greater growth

We know that sales of the discounted iPhone 4 help boost Apple’s figures for the quarter, and IDC says that Samsung enjoyed a similar boost from the Galaxy S3, which received price cuts following the launch of the Galaxy S4.

While Samsung remains out in front, the progress of LG is promising for the Android ecosystem. IDC credits Korea’s LG for “realiz[ing] a profit from its steady diet of Android-powered smartphones,” and it is certainly a different story to HTC which – though still posting slim profit – has seen its figures decline significantly over the past year or so.

IDC Research Manager Ramon Llamas says the data is proof that “the competition refuses to be shut out altogether” despite Apple and Samsung’s dominance.

“The opposite end of the spectrum is just as, if not more, interesting [than Apple and Samsung],” Llamas adds. “Lower-priced smartphones continue to gain traction, but the key for vendors will be to keep prices low while still offering premium devices and services. We fully expect to see large-screen smartphones and other flagship devices establish a presence within the lower-priced smartphone segment as well.”

IDC says that LG, Lenovo and co are performing well with high-end devices, as well as lower-priced offerings, but it will be interesting to see how they perform as and when Apple launches a much-anticipated new iPhone model, which is expected in the coming months – particularly if older iPhones are discounted.

We crunched IDC’s numbers since Q3 2011 to come up with this chart. Unfortunately it appears that the company regularly updates its figures without noting the changes, so the estimates for Q2 2012 are different to the comparative figures that were published today. Equally data is only released on the top 5 firms each month, but we think it is an interesting visual resource all the same.

Smartphone market share according to IDC | Infographics

Headline image via JOSEP LAGO/Getty Images

Top smartphone dog Samsung’s explosive growth period is over

Samsung 520x245 Top smartphone dog Samsungs explosive growth period is over

Despite posting record net profit for the second quarter of 2013 that was up 50 percent year-on-year, Samsung spent its earnings call assuring investors that the company is poised for further growth with its “competitive” line-up of products.

The reason for its defensive stance? There have been lingering concerns that the Korean company simply cannot maintain its explosive pace of growth any longer. In fact, Samsung warned that growth in its mobile business will slow in the third quarter due to the onset of more competition as more products are being rolled out.

Record profit not enough

Samsung announced its 2Q 2013 earnings today with KRW57.46 trillion ($51.7 billion) in revenue, in line with its earlier estimate of KRW57 trillion. Operating profit stood at KRW9.53 trillion ($8.6 billion), also in line with the guidance of KRW9.5 trillion, while net profit was seen at a record-high figure of KRW7.7 trillion ($6.9 billion).

Samsung has experienced phenomenal growth to date over the past year – its revenue increased by 21.9 percent from 2011 to 2012, while its operating profit jumped 85.9 percent and its net profit surged 72.5 percent. This was largely attributed to the roaring success of the Galaxy S3 phone – which hit 40 million channel sales in just seven months. Back in January, the company announced that Galaxy S shipments had topped 100 million, with the Galaxy S3 alone contributing 41 million units.

According to a Guardian report in 2011 citing IDC figures, Samsung shipped just 7.3 million phones in Q3 2010. Fast forward to Q2 2013, and IDC estimates that Samsung – which hasn’t provided figures publicly since Q3 2011 – shipped 72.4 million smartphones during the quarter.

Screen shot 2013 07 26 at PM 12.21.55 Top smartphone dog Samsungs explosive growth period is over

The Galaxy S4 and marketing expenses

This piled on expectations for the Galaxy S4 phone, which has not disappointed – it became Samsung’s fastest shipping device ever when it topped 10 million “channel sales” (aka shipments to retailers) within a month of its launch, and reports from Korean media claim the device has already tipped the 20 million shipment mark.

163703721 730x485 Top smartphone dog Samsungs explosive growth period is over

However, how much goes into pushing these products? A lot, it seems. Samsung acknowledged in its earnings call that the increased expenditure related to promoting its products and tie-ups with distribution channels has taken a toll on the company’s financials, though it did not disclose any figures.

In 2012, Samsung spent $401 million advertising its phones in the U.S. compared with Apple’s $333 million, according to ad research and consulting firm Kantar Media, the Wall Street Journal reported in March this year.

The Korean firm is known for aggressive marketing and advertisements whenever it rolls out a new phone. For the launch of its flagship Galaxy S4 phone, Samsung held an over-the-top press event at New York’s Times Square featuring a live orchestra and a long series of skits.

Worries over market share

Many analyst firms have pegged Samsung as consistently having the greatest market share in smartphones. Strategy Analytics noted that Samsung was the world’s number one smartphone seller for the first quarter of this year in terms of revenue, while IDC has just pinned Samsung’s market share at 30.4 percent for the second quarter of this year according to shipments. However, in its latest report IDC noted that Samsung’s share of the market has receded slightly, going from 32.2 percent last year to 30.4 percent in Q2 2013.

During its earnings call, Samsung executives acknowledged that they see intensifying competition among vendors, resulting in “a certain amount of uncertainty.”

An ABI research report released today noted that feature phone shipments declined 20% year-on-year in the second quarter to 195 million units, as low-cost manufacturers continued to penetrate the up-market with increased device specifications. Senior Practice Director Jeff Orr says:

The second half of 2013 will be defined by fierce competition between price-aggressive OEMs moving toward the middle tiers for increased margins while at the same time top tier OEMs are diversifying portfolios into the middle in search of continued growth.

It is not only Apple that Samsung is facing off against – that analysis would be much too narrow-minded. Indeed, IDC noted that LG’s record haul of 12.1 million smartphone shipments represented a 130 percent year-on-year improvement, while Chinese firm Lenovo charted 130.6 percent year-on-year shipment growth.

Samsung said it would be likely rolling out more mid-to-low-end smartphones during the second half of this year, which may be targeted at keeping its hold on emerging markets. In the first quarter of 2013, Samsung sold a record 12.5 million smartphones in China alone.

Samsung has already been taking steps to cover as many aspects of the smartphone market as possible. Its Galaxy S4 has been rolled out in various versions – the Mini, the Active, the Zoom and the LTE-A.

GALAXY S4 zoom 4 730x486 Top smartphone dog Samsungs explosive growth period is over

Concerns over stock price

Samsung executives also addressed the worrying issue of the company’s stock price, which has underperformed the market recently. The Wall Street Journal has reported that brokerages have been downgrading the company’s stock and revising downward their shipping and earnings forecasts, with Samsung’s market value since mid-March declining by nearly $30 billion.

They argued that the current situation is a reflection of global macroeconomic issues that have affected the Korean stock market rather than company issues and that industry experts believe its stock is undervalued, but that the management will closely monitor the stock movement and strengthen its competitive advantage to improve the stock performance.

Future growth opportunities

With the smartphone market approaching saturation, Samsung executives identified the tablet and business-to-business (B2B) market as future growth opportunities. Samsung’s tablets have been posting solid mid-10 percent range growth, with 30 percent quarter-on-quarter growth expected for tablet shipments in 3Q 2013, according to the company. IDC noted that Samsung grew its share in the tablet market to 17.9 percent in the first quarter of this year, taking second place after Apple.

Samsung has also been on a drive to garner more market share in the B2B space, launching a global marketing campaign for business users and getting security approval for the Galaxy S4 from the US Department of Defense (DoD), clearing the way for the device to be used as part of a new policy for US government staff.

Samsung says it has one further flagship device to launch this year, and that’s almost certain to be the Galaxy Note. New versions of the tablet-cum-smartphone device has typically been launched at the IFA trade show in Berlin in previous years, and it is expected that the latest version will be unveiled at IFA 2013 which takes place next month.

The firm says that with this planned launch, it expects to see demand for its products increase and growth to sustain in the third quarter. Will Samsung’s growth ever be as rapid as the past year though? That could be hard to achieve given the amount of competition in the smartphone sector – what with Apple rumored to roll out a lower-priced iPhone and other players coming up with more products.

Samsung may just have to settle for slower growth – which is actually a natural progression after its spike over the past year, but this means investors will have to adjust their expectations accordingly.

Image Credit: Kevork Djansezian via Getty Images

Samsung Says Apple Is Trying to Patent Pretty Phones and Shouldn’t Get More Than Another $52 Million

Samsung said that Apple’s lawyers are conflating a few patents with the entirety of the iPhone and argued the Korean electronics giant shouldn’t have to pay more than $52 million for a series of phones and tablets found to infringe on Apple patents.

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Everett Collection / Shutterstock.com

“Apple has tried to mischaracterize these patents so they are the iPhone,” Samsung lawyer Bill Price said in closing arguments of a partial retrial of last year’s patent infringement case. Price argues that Apple essentially wants its patents to cover any phones that look pretty or work well.

This case is far more narrow than the one heard by a jury in the same courtroom last year. The bulk of last year’s $1 billion verdict, as well as the findings of patent, were upheld; however, Judge Lucy Koh ruled that the jury erred in part of its damage calculation, necessitating the current proceedings.

Jurors in this hearing have only to figure out what the right damage amount is for that portion of the case.

Price argues that Apple produced iPhone product reviews showing how pretty and revolutionary the phone was, but said that the issue is not the iPhone itself, but the handful of patents at issue. “These patents are very narrow,” Price said. “They don’t own everything they think they own and the scope of those patents are not as broad as they come in here [saying].”

He also disputed Apple’s contention that Samsung’s internal documents show it was looking to copy the iPhone.

“Competitors are always looking at rival products to see ‘Where are we lagging?’” Price said. “Apple does the same thing.”

Samsung’s arguments followed Apple’s closing, in which it made the case for why it is due a further $379 million.

Price wrapped up shortly before noon, saying: “Really what they are saying is in the market justice is ‘just us.’ “

Apple lawyer Harold McElhinny now has a few minutes of time to make a rebuttal argument and then the jury will start its deliberations.


Apple versus Samsung Full Coverage

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Is This Samsung Galaxy S4 (Exclusive) ?

Samsung Galaxy S4

Now this is quite interesting, everyone is waiting for the release of Samsung Galaxy SIII and there is a rumor that Samsung is planning to go for Samsung Galaxy S IV (S4) as well. Though it seems to be quite unbelievable and unreliable. Recently I was in a tour with my friends and I met with a guy who is currently working in Samsung. We had a conversation about Samsung Galaxy SII and upcoming device SIII. I was totally amazed when he told that Samsung is also planning to launch Samsung Galaxy S4 in near future. Although he was not at all interested to provide any information about Galaxy SIII or S4, but when I doubted on him regarding Samsung Galaxy S4, he told that a team of his senior officers are working on the specs and model of Samsung Galaxy S4 and he also showed me few projected models for Samsung Galaxy S4, which he had in his laptop. One of the most considered model is below.

Samsung-Galaxy-S4

On promising that I will not disclose his name, he let me know that Samsung Galaxy S4 might have 3D display and 3D camera. The device will have only one physical button on the right hand side, which is a POWER BUTTON along with one sensor touch button for camera. Left side of the device has sensor touch buttons for volume up and volume down. Again there are four sensor touch buttons at the bottom of the screen.

After seeing the above image, it seems that front camera and proximity sensor has been shifted to right for better management. The screen size is still undecided. He did not provided any information about CPU, RAM, memory, etc. The knowledge he had about this device makes me feel that this rumor is quite promising. I have taken that person in my circle so that we can get more information about Samsung Galaxy S4. I will update this post if I will get some more info.

Although, the knowledgebase and projected model pics he had shown me in his laptop about Samsung Galaxy S4 seems quite promising but still we cant confirm that this is trustable at this stage.

Related posts:

  1. Android 4 (ICS) For Samsung Galaxy S
  2. ICS For Samsung Galaxy S2 Coming Soon
  3. No Value Pack / ICS For Samsung Galaxy S

Shelly Palmer Talks Cell Phones on Always Mountain Time Radio

Shelly made an appearance on Always Mountain Time radio and hit on a wide array of topics in tech: the Connected World, how small businesses have had to change over the years and the different types of media that businesses have to deal with. He also talks about cell phones: why everyone hates the iPhone 5, why you should love the Galaxy S IV, why the Lumia 1020 matters, and why you’d want to buy the BlackBerry Q10.

Nokia Chose Windows Phone Because it Feared Samsung Would Rule Android

Nokia

Nokia’s decision in 2011 to pin the future of its smartphone business on Windows Phone has been heavily scrutinized over the years, but the reasoning behind that choice is only becoming fully clear now. When asked last week if he regretted not choosing Android, CEO Stephen Elop told reporters that he’s “very happy with the decision we made.” He added, according to The Guardian, that “What we were worried about a couple of years ago was the very high risk that one hardware manufacturer could come to dominate Android.” At the time, Nokia “had a suspicion of who it might be, because of the resources available, the vertical integration.” That company, of course, is Samsung. Elop continued, “Now fast forward to today and examine the Android ecosystem, and there’s a lot of good devices from many different companies, but one company has essentially now become the dominant player.”

Read the full story at The Verge.

The BlackBerry Q10 Review: Is It Right For You or Should It Be BlackBuried?

BlackBerry Q10

Back in the day, owning a smartphone (pretty much) meant owning a BlackBerry. If you needed to get work done on the go, a BlackBerry was THE phone to get. Being a “CrackBerry addict” was a badge of honor and, if a high school kid had one – he or she was absolutely in the “in” crowd because BBM was the “cool kids” social media tool of choice.

That was then. Today, in a world dominated by touchscreens and (most importantly) apps, having a BlackBerry screams to all the world about your “old school” roots or that the IT department at your job is so antiquated that it is forcing you to use this distant relative of a modern-day device.

Whether you’re on iOS or Android – which, according to StatCounter, combine to make up over 60 percent of the mobile market – you have access to hundreds of thousands of apps. Apps define today’s mobile experience more so than any other feature on your phone. Secondary mobile platforms, like Windows Phone and BlackBerry, simply can’t compete; their app stores are suboptimal when compared to Apple and Google.

But do they need to compete?

Back in January, BlackBerry showed off its newest operating system, alongside its new flagship phone, the Z10 (which recently had its price slashed all the way down to $49.99 after poor sales in its first six months). The Z10 was a smartphone modeled after top-tier phones like iPhone and Galaxy S III, and featured a 4.2″ touchscreen. But much like Windows Phone, a lack of app support and lackluster hardware made the Z10 a nonstarter.

Perhaps the last act of a desperate organization, BlackBerry recently launched the Q10, which is a return to the familiar BlackBerry form factor for hardcore BlackBerry fans. The Q10 has a keyboard and a small, but serviceable touch screen.

So – what makes the phone special? Is it worth buying? Should you switch from your iPhone or Android to a Q10? Is it worth an upgrade from older BlackBerry phones?

What Makes it Special?

The Q10 is the BlackBerry that should have come out three years ago. It’s the next generation BlackBerry with a keyboard, and anyone who is a BlackBerry fan is going to want this phone.

The Q10 looks like your traditional Blackberry. It has a 720 720 pixel touchscreen that takes up the top of the device, and a physical keyboard on the bottom. The phone resembles the BlackBerry Bold, the most popular BlackBerry device of a generation long past. There’s no track ball on the Q10 as the touchscreen renders it obsolete.

If you want flawless e-mail and texting with a physical keyboard – and don’t need much more than that out of a smartphone – this is the device for you. I’d forgotten how nice it feels to type on a physical keyboard. I’ve been a glass keyboard user for quite some time, between my new Galaxy S IV and the iPhones I’ve had for the past few years.

What Are the Downsides?

Try as it might, BlackBerry is not an app-driven platform. If you’re an app person, this isn’t the phone for you; you’re going to want to stick to an iPhone or high-end Android device. (But you already know this.)

We live in a world where new phones have to have all kinds of new capabilities. Apps really make the phone. Since Steve Jobs created the App Store and let third-party developers take his platform to the next level, having a bountiful app store is a necessity for a smartphone to succeed.

It is important to understand that the BlackBerry App Store does have apps for the most popular services: Facebook, Twitter, LinkedIn, Sports, News, Weather, etc. It just doesn’t go deep and, to be frank, it never will.

The BlackBerry is not an AppPhone; Androids & iPhones are not BlackBerrys

If you hold up a Galaxy S IV next to the Q10, side-by-side, even a person who’s never used a smartphone before will be able to tell that the devices are very, very different.

Side by Side: Galaxy S IV and BlackBerry Q10

It’s easy to tell which is the better, more modern phone.

There’s no contest. A 720 720 screen – even with a nice, physical keyboard – isn’t enough to make up for the lack of screen real estate that the S IV (or other phones of its size) provides. The Q10 is not a device you will enjoy reading an eBook with, nor will you care for its web browsing experience. That said: in a pinch, it will do.

Should You Upgrade?

The BlackBerry Q10 has one purpose and one purpose only: If you’re a BlackBerry Bold or Curve user, and you want the next-generation BlackBerry, it’s here. The Q10 has 4G LTE, an app store with basic essentials and a decent camera. If you’re sporting a Bold or Curve – or, if you already have an iPad or other tablet and simply need the best possible typing experience available on a handheld device. upgrade to the Q10 now.

If you’re anyone else… $199 with a two-year contract will put you in a much more powerful, much more capable device running Android 4.2.x. Did I forget to mention the iPhone 5? Yep. That is not a device you should be considering right now. It’s already two-year-old technology. If you’re in the market for a smartphone or app phone right now, go with Samsung, Sony, LG or HTC. Apple has a lot of catching up to do.