updated 11:15 pm EDT, Thu October 28, 2010
Samsung Q3 up on own phones but also iPad sales
Samsung today reported a significant increase in profit that was driven as much by Apple as by its own business. The company's revenue surged 12 percent year-to-year to $35.78 billion with a 17 percent hike in profit to $3.97 billion, but most of this profit came from its semiconductor business and its success with flash memory. The group's revenue spiked 60 percent to $6.66 billion and was credited "especially to smartphones and tablet PCs," the Korean company said.
The company's phone shipments were up 19 percent to 71.4 million phones and accounted for a large portion of Samsung's flash memory use, but as the Galaxy Tab wasn't shipping until the very end of the quarter, most of the tablet flash memory would have been associated with Apple's iPad. A teardown of the device showed Samsung memory. Apple is often considered Samsung's largest flash memory customer and has also used the storage in iPhones, iPods and SSD-equipped Macs like the MacBook Air, although newer Airs are using Toshiba memory.
On Samsung's side, phone growth and the mobile group's $1 billion profit were dominated heavily by smartphone-class hardware, primarily the Galaxy S and the Wave. Android was favored over Samsung's own Bada platform by a wide margin, as the company now planned to have shipped 10 million Galaxy S phones for all of 2010 but just two million Wave phones.
The electronics giant warned that while mobile was on the rise, traditional computers were on the decline. While flash memory was up due to phones and tablets, RAM was facing an oversupply due to "weak PC demand," Samsung said. Computer LCDs were facing a glut for similar reasons and saw a much smaller $462.31 million profit, although the Galaxy Tab and iPad were expected to help out in the near future by boosting tablet-sized LCDs.
TV sales and cameras faced much bleaker results. The combined group lost $204.49 million that Samsung blamed on commoditization. While TV sales were up with the World Cup in South Africa credited as helping, fierce competition made it difficult to get any profit. Sales after the Cup also crashed, the company said, although it expected that fall sales would keep shipments up even if profits vanished.
Samsung's results should guarantee it a firm second place in phones overall, behind Nokia and ahead of LG, but the results have pointed to the company still struggling to compete as well as North American firms in advanced mobile platforms. It ships multiple other Android models, but its 10 million yearly Galaxy S sales trail well behind Apple's 14.1 million iPhones just in the last quarter. Galaxy Tab shipment numbers have never been disclosed, but they're expected to be well below the millions of iPads Apple has been shipping in the first two quarters after launch.