Samsung quarterly profit jumps 76 per cent on smartphone and memory chip sales

South Korea's Samsung Electronics said on Friday net profit soared 75.6 per cent to a record 7.04 trillion won ($6.6 billion) in the fourth quarter of 2012, driven by strong smartphone and memory chip sales.
The world's largest technology firm by revenue and top smartphone maker also saw a record operating profit in October-December of 8.84 trillion won, up 89.7 per cent from a year earlier.

The figures were largely in line with Samsung's guidance released earlier this month.

For all of 2012, Samsung logged a net profit of 23.8 trillion won, with revenue and operating income reaching 201.1 trillion won and 29.05 trillion won respectively.

The company said growth in the fourth quarter was mainly driven by "solid sales" of its flagship Galaxy S3 and Galaxy Note 2 smartphones.

IT and Mobile Communications accounted for the lion's share of operating profit in the fourth quarter, racking up 5.44 trillion won on revenue of 31.32 trillion won.

However, Samsung cautioned that the "furious growth spurt" in the global smartphone market in 2012 would be "pacified" this year by intensifying price competition compounded by a slew of new products.

"In the first quarter, demand for smartphones in developed countries is expected to decelerate," it said in a statement.

Samsung's growth momentum still remains faster than smartphone rival Apple's, and analysts expect it to stay that way for much of the year due to a larger mix of products.

While shares in Samsung have climbed 12 percent over the past three months, Apple has slumped 20 per cent.

The California-based company announced record quarterly profits on Wednesday, but investors soured on forecasts of levelling growth and reduced profit margins.

While Samsung does not provide figures for quarterly smartphone shipments, analysts estimate the company sold 63 million smartphones on total handset sales of 110.5 million units.

The company's chip, display panel and consumer electronics divisions also saw an improvement in their quarterly results.

Memory chip business contributed $1.3 billion in operating profits, a 39 per cent quarterly increase. However, Samsung warned demand in the first quarter of 2013 would be tempered by a seasonal drop in PC and mobile device sales.

Although demand was weak for PC DRAM during the fourth quarter, the semiconductor unit posted $8.97 billion in sales, a 10 percent increase quarter over quarter.

October-December saw strong sales of LED TVs, but the global downturn resulted in slipping demand for home appliances in general, despite a rise in sales of high-end refrigerators and washers in the United States and Europe.

"Despite uncertainties in Europe and concerns over the US fiscal cliff... we did our best this quarter to achieve strong earnings based on... high value-added products as well as our technological competitiveness," Investor Relations chief Robert Yi said in a statement.

"Heading into this year, we are expecting a slow recovery in the component business due to reduced capital expenditures, while competition in the set business will intensify further as demand slows," Yi said.

China's mobile users crosses 1.11 billion in 2012

China, with a population of over 1.3 billion now has 1.11 billion mobile phone users, according to official data released.

The Ministry of Industry and Information Technology (MIIT) said in a statement that mobile phone users represent 80 per cent of all phones users in the country.

As per recent released data, China's population stood at 1.354 billion at the end of 2012, 6.69 million more than that at the end of 2011.

The number of mobile phones owned by every 100 people reached 82.6 by the end of 2012, state-run Xinhua news agency reported.

Last year China crossed a billion mark and recorded 125.9 million new mobile phone users, among whom 104.38 million were 3G mobile phone users, bringing the total number of 3G users to 232.8 million, the MIIT said.

The ministry said the number of Internet users rose by 51 million to 564 million people, among whom 74.5 per cent, or 420 million people, surf the Internet with their mobile phones.

The Internet penetration rate reached 42.1 per cent by the end of last year, up 3.8 percentage points from a year earlier.

Whereas, the mobile internet boom continues in the country and it is also fast emerging as new medium posing a major challenge to the official media's monopoly in the country.

Social networking websites like Twitter and Facebook are banned in China but the number of Chinese microbloggers, akin to Twitter this year crossed 274 million mark, the largest in the world as internet medium has emerged as the main stay of public expression in a tightly controlled official media set up in China.

According to data released by China Internet Network Information Centre, (CINIC) last month 274 million Chinese had microblog accounts as of June last year most of them were operated through mobile phones.

The number of Internet users in China rose to 538 million by June last year, meaning that four out of ten Chinese access the Internet, the CINIC report said.

It is estimated that by 2015 China will have more than 800 million Internet users, one quarter of which will be from rural areas.

Domestic IT market: What will drive growth in 2013

New implementations of business software (like enterprise resource planning software) and efforts towards modernization of IT infrastructure will drive the domestic technology market, according to Forrester Research.

This is quite a contrast to 2012, which was a relatively lackluster year for the tech market in India. Worse-than-expected economic growth combined with political gridlock on economic reforms kept the tech market from reaching its full potential in 2012.

Some dynamic pockets of growth existed nonetheless, mostly within Indian companies in the process of globalizing their activities. In these companies, Forrester has witnessed large business software implementations, as well as modernization projects for their IT infrastructure assets.

These investments will continue to drive growth in 2013 in the private sector side of the market. The public sector represents a significant growth opportunity for India's IT spending growth, although the market will experience a slow 7 per cent growth in rupees through 2014 due to the parliamentary elections scheduled for 2014, says a Forrester release.

Computer equipment will continue to lead the Indian tech market: Computer equipment is the largest category of IT purchases and will equal $11 billion in 2013.

Communications equipment growth will slow down in 2013: Following the government's decision to cancel 122 2G licenses allotted in 2008, telecom service providers had to re-acquire the licenses in late 2012. These new payments will significantly weaken the balance sheets of most telecom providers in 2013.

Software and IT consulting markets will be driven by new tech investments in 2013: Cloud, mobility, business analytics, and social are increasingly attracting interest from Indian organizations. The lack of internal technical and management skills will push them to leverage external service providers.

IT outsourcing services will grow faster, but the maturity level will remain low in 2013: At 13 pc growth, this market segment will continue to enjoy above average growth in 2013.

The maturity of these deals has been slow to increase, although Forrester expects that the increasingly complex business, infrastructure, and applications environment will push companies to hand over more responsibilities to the service provider. 

Samsung Galaxy Note II, S III security flaw found

A security loophole in Samsung devices running on the Exynos 4 System on Chip (SoC) has been found. This flaw is in the kernel and hands over the access of the physical memory of the phone to any user and opens it up to malware.

A developer who goes by the name Alephzain on the forum XDA-developers came across a flaw in his Samsung Galaxy S III while trying to root it. He posted, "The good news is we can easily obtain root on these devices and the bad is there is no control over it."

The devices that can be compromised by this loophole include Galaxy Note II, Galaxy S II, Meizu MX and all others with Exynos 4210 and 4412 chipset with Samsung kernel sources, says Alephzain.

However, another XDA developer has already found a fix to the problem, though it will render the phone's camera useless. The developer, Chainfire, has released an application called ExynosAbuse, which will boot before all others, including any malicious apps, and stop them from executing when the phone is turned on.

Samsung to post record quarterly profit of $8.3 billion

Samsung Electronics, the world's largest technology company by revenue, expects record earnings for the fourth quarter of 2012 as shoppers continued to snap up its smartphones and tablets.

The company said its operating profit for the October-December quarter would be about 8.8 trillion won ($8.3 billion), up 89 per cent from a year earlier and higher than expectations. It will release its full quarterly result including net profit at the end of this month.

The maker of Galaxy smartphones and tablets said fourth quarter revenue likely rose 18 per cent from a year earlier to 56 trillion won.

Analysts said nearly 70 percent of the operating income for the quarter was likely generated by Samsung's mobile division that makes and sells smartphones and tablets.

Samsung's mobile business, which recently overtook Apple in smartphone sales and Nokia in mobile handsets, has driven Samsung's earnings growth in recent quarters. Samsung's quarterly operating profit has risen steadily since the final quarter of 2011, while rival mobile-phone makers such as Nokia, Research In Motion and HTC have experienced falling market share and profits.

Samsung shipped at least 60 million smartphones in the last quarter of 2012, according to analysts' estimates, about 10 percent growth from the previous quarter.

The launch in September of the Galaxy Note II, a giant smartphone with a 5.5-inch screen and a digital pen, helped Samsung retain its market dominance during the Christmas holiday season despite competition from Apple's iPhone 5, analysts said. Samsung's flagship Android device, the Galaxy S III, also sold strongly.

Jin Sung-hye, an analyst at KTB Securities, estimated Samsung shipped 15 million S III smartphones and 7 million of the Note II during the final three months of 2012. The surprise popularity of the Note II device prompted other handset makers to increase the screen size of their smartphones as consumers embrace a wider mobile-phone screen to watch videos.

Market watchers speculate that Samsung will introduce a new Galaxy S smartphone, likely to be named the Galaxy S IV, before the end of April. Samsung usually rolls out the latest iteration of its Android-based flagship smartphone before the end of the second quarter, taking advantage of the time when rivals are months away from introducing new smartphone models.

With the early rollouts of the new Galaxy S model and an update to the Note series later in the year, analysts predict Samsung will sell at least 300 million smartphones in 2013, widening its lead over Apple. Samsung's smartphone shipments likely surpassed 200 million for the first time in 2012.

The company plans to act more aggressively to increase its share of the tablet PC market this year, which is still dominated by Apple's iPad, its executives said in an October conference call. The release of mini tablets that are between the size of smartphones and standard tablets also opens up a new growth area for Samsung.

While the mobile phone division has replaced Samsung's semiconductor business as the biggest profit generator, robust demand for smartphones around the world is benefiting Samsung's semiconductor operation as well. The company is the world's largest supplier of TVs and memory chips.

Analysts said Samsung's semiconductor division fared better in the last quarter than the quarter before as higher Samsung phone sales and launches of new mobile products by its customers lifted demand for Samsung's mobile processors.

In the first quarter of this year, market watchers said the strengthening of the South Korean currency against the US dollar and the Japanese yen could hurt Samsung's component businesses, which is facing seasonally weak demand for TVs and display panels. But others predict Samsung will ship more smartphones than the previous quarter, which could outweigh lower TV and panel sales.

The South Korean company has been in global legal battles with Apple, one of its biggest clients, for nearly two years. Last month, Samsung dropped its bid to seek a sales ban against Apple's mobile products in Europe, saying it would like to protect consumer choice. Samsung, which is under investigations by the European Commission over its practice of licensing key mobile patents, is maintaining its lawsuits against the iPhone maker in other countries.

Shares of Samsung Electronics fell 1 percent in Seoul after earnings release. Samsung's shares, which gained 11 percent in the fourth quarter, hit a record high level earlier this month.

If Samsung's fourth quarter results are in line with Tuesday's guidance, the company will report 29 trillion won ($27.3 billion) operating profit on revenue of 201.1 trillion won ($189 billion) for 2012. 

Samsung smartphone sales touch 63 million in Q4: Report

Samsung Electronics, the world's top handset maker, sold 63 million smartphones in the fourth quarter and commanded a 29 percent share of the global smartphone market, a report by research firm Strategy Analytics showed on Friday.

In 2012, Samsung sold 213 million smartphones with a 30 percent market share, followed by Apple, which sold 135.8 million iPhones with a 19 percent market share, the report said.

The company said in Friday's earnings call that net profit soared 75.6 per cent to a record 7.04 trillion won ($6.6 billion) in the fourth quarter of 2012, driven by strong smartphone and memory chip sales.

The world's largest technology firm by revenue and top smartphone maker also saw a record operating profit in October-December of 8.84 trillion won, up 89.7 per cent from a year earlier.

The figures were largely in line with Samsung's guidance released earlier this month.

For all of 2012, Samsung logged a net profit of 23.8 trillion won, with revenue and operating income reaching 201.1 trillion won and 29.05 trillion won respectively.

The company said growth in the fourth quarter was mainly driven by "solid sales" of its flagship Galaxy S3 and Galaxy Note 2 smartphones.

Nokia 808 PureView with 41MP camera becomes last Symbian device

 Embattled mobile maker Nokia has announced that the firm will stop producing its Symbian smartphone operating system.

In its earnings announcement, the Finland-based firm confirmed that the 808 PureView was the last new device.

The firm had earlier noted that Q4 2012 was the "last meaningful quarter for Symbian", and the new confirmation was not a surprise to industry observers, the Telegraph reports.

According to the report, Nokia's earnings release revealed that it sold 2.2 million Symbian units in Q4 2012, half as many as the Lumia range at 4.4 million.

Symbian was less than 14 per cent of the overall 15.9million smartphones.

Symbian was the biggest operating system in the world until it was overtaken by Apple, and was used from 1998 when it was a multi-brand proposition from Nokia, Ericsson, Motorola and Psion.

Nokia took complete control of it in 2008.