Q3 2012: Samsung shipped 57.1 million smartphones, operation profit ramps up to $7.3 billion.

WorldWide Tech & Science. Francisco De Jesùs.

Q3 2012: Samsung shipped 57.1 million smartphones, operation profit ramps up to $7.3 billion.

Samsung Electronics said Friday that it posted record operating profit of 8.1 trillion won ($7.3 billion) in the third quarter of this year on the back of robust smartphones sales. It is the fourth straight quarter of record operating profit.

The preliminary estimate for the July-September period is a 90.6 percent rise from 4.3 trillion won a year earlier and a 20.5 percent gain from the previous quarter, the company said in a regulatory filing. It is the first time a Korean company has exceeded 8 trillion won in quarterly operating profit.

In the filing to the Korea Exchange (KRX), the electronics giant also said it recorded record sales of 52 trillion won during the three-month period, up 26 percent from a year ago.

``For the first nine months of this year, Samsung has reaped 144.87 trillion won in revenue, while the combined operating profit reached 20.67 trillion won. It’s possible for Samsung to clinch 200 trillion won in revenue and 25 trillion won in operating profit for the entire year,’’ said a company spokesman.

The firm plans to announce the breakdown of its quarterly performance by business division later this month.

Samsung officials say smartphone sales have been good, while its consumer electronics and display-panel divisions also helped improve quarterly earnings and revenue.

“Our smartphone business was very impressive in the third quarter. We expect the phone-making division took up 68 percent by reporting at least 5.5 trillion out of the 8.1 trillion won quarterly operating profit,’’ said the official.

Samsung shipped 57.1 million smartphones in the third quarter, said leading local brokerage Daishin Securities. That will surpass the 50.5 million the firm shipped the previous quarter, a new high for a single vendor. 

Sales of the Galaxy S3 surpassed 20 million in the 100 days after its May debut, the firm said on Sept. 6. The company is also marketing the Galaxy Note 2, equipped with a stylus and a larger screen than the S3, after the first version sold more than 10 million. 

But the official stressed the firm’s other businesses have improved or at least secured their bottom line despite the debt-crisis in Europe and a slowdown in consumer spending in the United States and China. 

``This is a good sign for Samsung as its rivalry with Apple is expected to heat up in the fourth quarter after the release of Apple’s new iPhone,’’ said the official. 

Samsung’s consumer electronics unit, which mainly handles its television business, reported some 700 billion won in operating profit in the last quarter thanks to the rising popularity of high-end TVs in Samsung’s strategic business markets of Europe, North America and China.

Samsung’s semiconductor division, which is a traditional cash cow, is seen to create some 1 trillion won operating profit during the July-September period helped by an increased shipment of mobile application processors for use in smartphones and tablets and flash-type memory chips.

But executives admit they are nervous about the company’s dependency on the booming smartphone business.

The profit contribution from its phone-making business was between 20 and 30 percent before smartphones came out. But it was 73 percent in the first quarter of this year, according to Samsung.

``This is a new challenge for us. We are asked to find the next smartphone to diversify our business portfolio and lower the heavy dependency on that business,’’ said a Samsung executive by telephone.

According to a recent study by market research firm Strategy Analytics (SA), the demand for smartphones priced over $300 will lower to 30 percent next year from this year’s estimated 39 percent, meaning Samsung will suffer from a possible decline in average selling price (ASP) _ a barometer to gauge profitability.

Samsung and Apple are dominating global demand for smartphones. But the rapid rise of China’s budget smartphone manufacturers including ZTE are posing another threat to Samsung and urging its top decision makers to develop other businesses for corporate sustainability.

``I can say today’s smartphone boom is just like a carbonated drink. I mean smartphones don’t need huge investment, unlike memory chips, and could be a short passing phase,’’ said another Samsung official.  

China smartphone market: Sony Mobile Communications AB will win enormous opportunities.

WorldWide Tech & Science. Francisco De Jesùs.

China smartphone market: Sony Mobile Communications AB will win enormous opportunities.

Sony Mobile Communications AB will win enormous opportunities in China's smartphone market if the company always focuses on the right products, is quick to respond to market demand and is speedier in innovation, according to Sony Mobile's top officer in China.

The Chinese smartphone market is extremely "tough and intense", said Magnus Ahlqvist, president of Sony Mobile China. "The market has all the international players, as well as a number of Chinese rivals who also perform actively," Ahlqvist said in an exclusive interview with China Daily.

After the Japanese electronics giant Sony Corp bought out Ericsson AB's half of their 10-year-old venture for $1.3 billion in February, Sony Mobile has become a wholly owned subsidiary under Sony Corp and is acting as a pillar for the company's turnaround plan.

With China being the world's biggest smartphone market, with an expected smartphone shipment of more than 164 million units this year, Sony Mobile regards it as a key customer and focuses more on it now, he said.

"Sony Mobile tries to ensure it does very deep analysis on the Chinese market. Then we can have a good assessment of what are the opportunities going forward," Ahlqvist added.

Unlike Samsung Electronics of South Korea, which has a complete product line covering all price levels, Sony Mobile's products were mainly targeting mid- to high-end segments. Of all the global brands competing in China, Sony Mobile had about 60 percent of its smartphones sold at a price of more than 2,000 yuan ($315), behind only Apple Inc and Research In Motion, according to a study conducted by Barclays.

However, the majority of Chinese people can only afford a smartphone with a price tag of between 700 yuan and 2,000 yuan, which means Sony Mobile has ceded the lion's share of the booming Chinese smartphone market to Samsung and local competitors.

"Yes, we have probably lost shares in those segments because we have not addressed them, so we don't really have a presence today," Ahlqvist said. But, on the other hand, every company has to do a good job in areas it is really expert at, he continued.

Sony Mobile's performance in the mid- and high-end sectors has already given us a lot of confidence, he pointed out.

Ahlqvist said Sony Mobile had achieved a clear increase in market share in the higher end segment in the second quarter in China. "Combined with our creative technology, rich content and unique design, I am quite confident that we will continue to grow at a fast pace," he said.

Sony Mobile has introduced 12 smartphone models in the Chinese market this year. Ahlqvist said it is a must for his company to better understand customers' needs and be quick to launch products satisfying their demands. "The Chinese market is changing very fast," he said. Therefore, every product may have a shorter life span and should be replaced by new devices with advanced technologies.

Analysts argued that Sony Mobile might have the most potential to challenge industry's dominant players - Samsung and Apple - since Sony Mobile could take advantage of tremendous resources from its parent company Sony Corp.

"The competition in the mobile phone industry is no longer merely relying on hardware, but also on software and the whole eco-system as well," said Wang Ying, an analyst at Beijing-based research firm Analysys International. Sony is a rare, comprehensive entertainment company, with operations in movies, music, gaming and financial services. If it integrates well, those resources would quickly make Sony devices stand out, she said.

In a previous interview, Ahlqvist said there is a trend that people like to enjoy content and services through multi-screens, including smartphones, tablets, televisions and personal computers. "Through our many devices, people can enjoy all of Sony's content - from movies to music and games - in a way no one else can," he said.

Meanwhile, Chinese customers are familiar with the Sony brand thanks to the company's lengthy presence in the Chinese market. It's a positive benefit for Sony Mobile after it returned to Sony, he added.

Sony had a 3.5 percent share of the global smartphone market in the second quarter, according to Gartner Inc. Samsung topped the rankings with a 29.7 percent share, followed by Apple with 18.8 percent.

"I doubt Sony has the scale to re-emerge as a serious contender anytime soon," said Duncan Clark, chairman of BDA China, a consultancy company that follows China's IT industry.

Kunimasa Suzuki, a Sony executive vice-president overseeing mobile products, said earlier this month that Sony plans to draw on its skills in video games, cameras and audio players in developing smartphones and tablet computers, Bloomberg reported.

In April, when Sony's chief executive officer Kazuo Hirai laid out his strategy for the company, he said he expects the mobile products group, which also includes tablet computers and traditional personal computers, to generate more than 1.8 trillion yen ($23 billion) in revenue with a "significant improvement" in operating profit within three years.

Sony's mobile products division posted a loss of 28.1 billion yen in the fiscal first quarter that ended in June. However, Sony raised its estimate of smartphone shipments by about 2 percent to 34 million units for the year ending in March next year.

Samsung had begun production of an ultra-fast embedded memory for smartphones, tablets and other mobile devices.

WorldWide Tech & Science. Francisco De Jesùs.

Samsung  had begun  production of an ultra-fast embedded memory for smartphones, tablets and other mobile devices.

Samsung Electronics has announced that it had begun volume production of an ultra-fast embedded memory for smartphones, tablets and other mobile devices in 16GB, 32GB and 64GB densities.

The new Samsung eMMC (embedded multimedia card) Pro Class 1500 delivers the industry’s fastest speeds for an embedded memory device, reading data sequentially at up to 140MB/s and writing it at up to 50MB/s. For random reading and writing, it can process up to 3500/1500 IOPS (inputs and outputs per second), four times the speed of previous eMMC solutions.

The ultra high-speed storage device uses Samsung’s 64Gb NAND with a toggle DDR 2.0 interface based on the company’s latest 20nm-class process technology. The new eMMC’s fully managed NAND memory comes with its own high performance controller and intelligent flash management firmware.

To meet the market need for thinner designs for high-end mobile devices, Samsung offers the new eMMCs in two, four- and eight-die stacks with the largest capacity of 64GB’s being only 1.2 millimeters thick and weighs 0.6 grams.

Samsung eMMC Pro Class 1500 is the first to support the latest JEDEC e-MMC v4.5 specification that standardizes more features to improve performance, efficiency, security, and reliability such as: a SDR-200 Interface (200MHz, 200MB/s max bandwidth), cache handling, dynamic handling, file sanitizing and power-off notification.

The Samsung eMMC Pro Class 1500 is designed for next generation premium mobile products. It will improve system performance and the user experience for a wide variety of applications including web browsing, 3D and HD video capture and playback, multi-tasking activities, augmented reality and the use of social networking sites and interactive graphics-rich gaming.

“With the production of 64GB Samsung eMMC Pro Class 1500, we are delighted to provide the highest performing mobile storage solutions available that support the latest eMMC standard, for worldwide mobile device makers. We will confidently strengthen our research and development efforts to continually bring to market the most advanced mobile storage devices based on next-generation standards,” said JaeHyeong Lee, vice president, memory product planning and application engineering at Samsung Electronics.

Huawei targets 60 million smartphones shipments in 2012.

WorldWide Tech & Science. Francisco De Jesùs.

Huawei targets 60 million smartphones shipments in 2012.

According to Digitimes Huawei Technologies, a China-based vendor of telecom equipment and mobile and home-use terminal devices, has set global target shipments of 60 million smartphones in 2012, thereby standing a chance of becoming the world's third largest vendor of smartphones, according to the company's corporate media relations vice president Scott Sykes.

Of the 60 million smartphones, 20 million units will be shipped in the China market. Huawei shipped 60 million handsets in 2011, with 20 million units of which being smartphones, Sykes indicated. Huawei has launched more than 40 models of smartphones in many markets including China, the US, Europe, Japan and India, and has set aside a marketing budget of US$200 million mainly for sales promotion of smartphones in 2012.

Huawei adopts two operational models for smartphone business, one is ODM production of customized models for mobile telecom carriers, the other is sale of own-brand models through retail channels. Huawei has a competitive advantage, that is, it has cooperated with more than 500 telecom carriers in over 140 countries through marketing telecom equipment.

In addition to Android, Huawei will offer Windows Phone models, and its smartphones are of a wide retail price range from US$100 to over US$400.

As Taiwan is a major supply source of components, Huawei hopes to set up a representative office and considers establishment of an R&D center in Taiwan. Huawei's fast growing sales of smartphones are expected to benefit its Taiwan-based partners, IC design house MediaTek and OEM maker Foxconn International Holdings.