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Home » Technology » Samsung Galaxy SIII powers record profits

Samsung Galaxy SIII powers record profits

The South Korean company estimated that its July-September operating income nearly doubled to 8.1 trillion won (£4.5bn) from 4.25 trillion won a year earlier.

Samsung outperformed analyst expectations, prompting its shares to rise by 1.5 per cent. The company is on track to report a record profit for the fourth quarter in a row.

Most analysts, however, expect the run to end in December as the South Korean group, the world’s leading maker of smartphones, TVs and memory chips, ramps up its marketing to counter Apple’s new iPhone and other products in a crowded $200 billion global smartphone market.

Samsung may have spent around $2.7 billion on marketing in July-September alone around the London Olympic Games and new Galaxy promotions, Credit Suisse has estimated.

This year’s expected profit will also trigger higher performance-related payouts to many of Samsung’s 206,000 staff early next year.

Samsung may also have to set money aside this quarter if it fails in an appeal to overturn a US court verdict that awarded more than $1 billion in damages to Apple for patent infringements by Samsung.

Byun Han-joon, an analyst at KB Investment & Securities, said the competitive nature of the smartphone market is the biggest threat to Samsung, given that phone sales drive a large proportion of the group’s profit.

“The biggest risk for Samsung is competitive product line-ups from its rivals such as the iPhone 5,” he said. “Because handsets drive most of its profits, one misstep in handsets could result in losses for the whole Samsung group.”

Profit at Samsung’s mobile division is likely to have more than doubled in July-September to around 5 trillion won – around two thirds of the total profit – as smartphone shipments topped 58 million, including up to 20 million Galaxy S IIIs.

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