Samsung Electronics posted a record $5.2 billion profit in the first quarter, overtaking Nokia as the world’s top mobile phone seller and seeing its Galaxy smartphones outstrip Apple’s iPhone at the high end of the market.
Samsung’s market leap
The South Korean group’s handset division shifted more than 20,000 Galaxy phones an hour during the quarter and contributed most of the company’s operating profit. Shares hit a lifetime high after the results, sending Samsung’s market value to $190 billion—about 11 times that of Japanese rival Sony, though still only a third of Apple’s valuation.
According to Strategy Analytics, Samsung sold 93.5 million handsets in the quarter, accounting for more than one in every four phones sold and toppling Nokia from the top spot after 14 years. That total included 44.5 million smartphones, giving Samsung a 30.6 per cent share of the high-end smartphone market; Apple sold 35.1 million iPhones for a 24.1 per cent share.
“Samsung and Apple are out-competing most major rivals and the market is at risk of becoming a two-horse race,” said Neil Mawston, an analyst at Strategy Analytics.
Rivals and next moves
CLSA analyst Matt Evans said Samsung’s smartphone success in the first quarter was the flip-side of Nokia’s disappointment. Nokia—long a leader in the booming smartphone segment until last year after it abandoned its own smartphone operating system for Windows Phone—managed to sell only 12 million smartphones in the first quarter.
Bernstein analysts say the near duopoly in high-end smartphones is unlikely to come under much threat this year or next. Samsung aims to maintain momentum with the London launch next week of a third-generation Galaxy S, hoping to boost sales ahead of the summer Olympics, where the group is among the leading sponsors.
“The Galaxy S 3’s specifications are expected to be sensational and it’s already drawing strong interest from the market and consumers,” said Brian Park, an analyst at Tong Yang Securities.
The new Galaxy will be powered by Samsung’s quad-core microprocessor, which the company hopes to see used in handsets sold by Nokia, HTC and Motorola, as well as Apple, its biggest customer for components.
