Telecom Lead Asia:
Galaxy smartphone has contributed substantially to Samsung’s quarterly profit
of $5.9 billion.
However, the South Korean tech giant is facing troubles due
to Europe’s debt crisis. Europe is its biggest market for televisions and home
appliances.
The flagship Galaxy smartphones are likely to have stretched
their lead over rivals Apple and Nokia – despite a parts shortage that meant it
struggled to keep up with stronger-than-expected demand for its latest S III
model.
While Samsung records strong handset sales, other businesses
such as chips and consumer electronics are battling weak prices and demand.
Europe is its biggest consumer electronics market and Samsung
may initiate cost cuts and product price increases should the euro fall further
from the current level, Reuters reported.
Some outlets are reporting 40-60 percent sales growth in Samsung
smartphones. That’s distorting the trading outlook which is challenging due to
the weak global economy and a weak euro.
In its April-June earnings guidance, Samsung estimated
operating profit jumped 79 percent to 6.7 trillion won from a year ago.
That would be 14.5 percent higher than the previous record
quarterly profit in January-March. Samsung estimated its second-quarter revenue
at 47 trillion won ($41.4 billion), below a 50 trillion won forecast.
Profit from the mobile division is likely to have more than
doubled to around 4.4 trillion won from a year ago, with sales of around 50
million smartphones – at a rate of 380 every minute.
Current quarter mobile profits are expected to forge further
ahead as the latest Galaxy model enjoys a boom before the next iPhone launch. The
mobile business brings in more than 70 percent of Samsung’s earnings.
While the next iPhone, expected later this year, will likely
slow Samsung’s handset earnings growth, it will boost the Korean firm’s
semiconductor earnings as Samsung is the sole producer of processing chips used
to power the iPhone and iPad, and also supplies Apple with mobile memory chips,
NAND flash and display screens.
