Samsung profits surge 79% boosted by smartphone sales

Samsung Electronics has said that it expects its profits to surge 79% in the second quarter as sales of its smartphones continue to grow.

 

It has forecast an operating profit of 6.7tn won ($5.9bn; £3.8bn) for the period, its highest quarterly profit since 2008.

Samsung overtook Nokia as the world’s biggest maker of mobile phones earlier this year.

Analysts said its profits could rise even further in the coming months.

“Earnings will be stronger in the current quarter, as sales of the high-end Galaxy S III will increase dramatically and drive the telecom division’s earnings to above 5tn won,” said Nho Geun-Chang, an analyst with HMC Investment Securities.

“We estimate shipments of the Galaxy S III will reach 19 million units in the third quarter.”

Samsung launched the Galaxy S III, the latest version of its Galaxy range of smartphones, in May this year, and the gadget has been well received in the market.

Last month, the head of Samsung’s mobile phone division Shin Jong-kyun said that the firm expects to sell 10 million units of the model by July.

While it has enjoyed early success, some analysts were of the view that its sales may slow towards the end of the year due to the widely-expected launch of the latest version of the Apple iPhone.

The iPhone is seen by most analysts as the biggest rival to Samsung’s smartphones.

“We expect a correction in Samsung’s earnings in the fourth quarter, as the launch of the new iPhone will lead to a decline in Samsung’s profit in the high-end smartphone business,” said Park Jong-Min a fund manager with ING Investment Management.

Increased competition from the iPhone is not the only challenge Samsung has to deal with in the coming months.

It is also involved in a number of legal disputes over patent infringements with Apple in various countries across the world.

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