Samsung High End Smartphones Drive Record 2013 Profits

Samsung Electronics just last week announced their Q4 2012 financial data, amid plenty of glad-handing and smiling. Samsung executives and shareholders have plenty of reasons to celebrate the last quarter of 2012, approximately 8.3 billion reasons to be exact. That is how many dollars of profit (8.84 trillion South Korean won) the company made on the back of strong high-end smartphone sales. The company also reported a recovery in chip set margins, but the 90% gain over that same quarter of 2011 was driven primarily thanks to the sales success of smartphones like the Galaxy Note II and Galaxy S III.

And making the entire year memorable, those fourth-quarter numbers were a full 10% better than the previous record-breaking profits which were posted in Q3 of 2012. Samsung’s telecom division had sales of $29.4 billion (over 31 trillion won), which was an impressive 50% over the same time frame last year. The Galaxy S line of smartphones for Samsung has sold more than 100 million units globally since its arrival, and the Galaxy Note II with its tablet sized display has been a best seller as well.

2012 will long be remembered as a hallmark year for Samsung Electronics in the smartphone marketplace. When the Galaxy S III debuted last year, it launched Samsung past Apple and gave them a decisive lead in global smartphone shipments. Selling almost twice as many smartphones as Apple in both the second and third quarters last year, Samsung doubled its smartphone market share from roughly 18% in Q2 of 2011 to a whopping 36% in Q2 of 2012.

Analysts point out that much of that market share flip-flop from Apple to Samsung is due to the number of lower-priced Android smartphones Samsung produced in 2012, as opposed to the higher-priced Apple iPhones. Flooding the market with lower-priced, low-end smartphones has long been a Samsung strategy, but what surprised analysts is the fact that their higher-end, higher-priced handsets like the Galaxy Note II and the Galaxy S III have done so well.

Samsung recently stated that their Galaxy S III smartphone tabulated its 40 millionth global sale, only two months after hitting 30 million. Considering this is only the 3rd generation Galaxy S series as opposed to the iPhone’s 5th model, which is actually a 6th generation product thanks to the iPhone 4S, the future looks exceptionally bright for the Galaxy S line up. Add the popularity and sales success of the larger screened Galaxy Note, Galaxy Note 2 and soon to launch Galaxy Note 3 with a huge 6.3 inch display, and things continue to look up for Samsung’s smartphone future.