Smartphones Contribute To Record Samsung Profits

Samsung is set to announce a record quarterly profit of $7.3 billion (£4.5 bn) for the period between July and September, more than double that of last year.

Smartphones could have contributed as much as two thirds of Samsung’s global group profit. The Korean manufacturer shipped 58 million units during the period, including 20 million units of its flagship smartphone, the Samsung Galaxy S III, more than any of its competitors.

Samsung profits rise again

Sales of mobile devices, along with high-end televisions, offset a reduced number of orders of chips and screens from Apple, its main rival and leading customer in the smartphone arena. The Cupertino-based company reduced its order of memory chips for the iPhone 5 as it wanted to diversify its suppler base.

Samsung remains a key supplier of components to Apple and provides it with microprocessors, flat screens and both dynamic random access (DRAM) chips and NAND memory chips.

There could be further strain placed on Samsung’s chip businesses as prices of its DRAM chips dropped 14 percent in the quarter and now trade below what it costs most contract manufacturers to build them.

This has contributed to analyst predictions that the company’s run of four consecutive record quarters will come to an end in December. Samsung is expected to ramp up its marketing efforts in the face of competition from the iPhone 5, while bumper profits might trigger performance-related bonus payouts to its 206,000 staff.

Samsung might have to set aside more money after a US court ordered it to pay £664 million in damages for infringing Apple’s design and software patents. Samsung has appealed the decision and has requested a retrial, claiming that the jury foreman failed to disclose his involvement in another lawsuit that could indicate bias against the company.

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