Samsung profit slides, but smartphones strong

Company says that its net income is down 18 percent year over year but that its mobile business is performing quite well.

Samsung's revenue was up during the second quarter, but the company wasn't able to stem its decline in net income.

During the period that ended June 30, the electronics maker generated revenue of 39.44 trillion Korean won ($37.4 billion), up 4 percent compared with the same period last year. However, the company's second-quarter profit of 3.51 trillion won ($3.3 billion) was off 18 percent compared with 2010.

According to Samsung, its mobile business helped drive higher revenue during the quarter. The company said today that mobile sales were up 43 percent year over year "due to strong demand for Samsung's Galaxy S II smartphone and other mobile devices."

The Galaxy S II, which launched in Asia in late April, has been catching on with consumers. Just yesterday, Samsung said that it sold 5 million units of the handset in just the first 85 days it was on store shelves. And the device, which has a dual-core 1.2GHz processor and 4.3-inch Super AMOLED Plus display, hasn't even launched in the U.S. yet.

Samsung failed to provide mobile-device shipment figures on its entire product line, but it did say today that gains were "in the high-single-digit range quarter-on-quarter." The company also pointed out that the average sales price of its smartphones increased by over 10 percent during the period.

All of the company's success in the mobile market is prompting some to wonder how long it might take before Samsung trumps Apple in overall sales. Speaking to Bloomberg recently, Strategy Analytics analyst Neil Mawston said that he believes Samsung's second-quarter handset sales reached between 18 million and 21 million . For its part, Apple sold 20.3 million iPhones during the same three-month period.

"Samsung's Android portfolio is selling strongly in most regions," Mawston told Bloomberg. "Samsung stands a reasonable chance of capturing the top spot on a quarterly basis if it can continue expanding its Android portfolio across high-growth markets like China and Brazil. Samsung and Apple will be at similar levels in smartphones by the end of the year."

Of course, Apple is at a bit of a disadvantage in that case. The company only sells the iPhone 4 and the iPhone 3GS. Samsung, on the other hand, sells a range of smartphones, including the Infuse 4G, Droid Charge, and Captivate, in addition to the Galaxy S II.

Outside of the mobile market, Samsung reported today that its flat-panel television shipments were up during the quarter and that its LED-backlit sets accounted for about half of all the LCD sets it sold during the period.

Looking ahead, Samsung is somewhat confident about its business. The company said that an expected increase in PC shipments will bolster its memory business and total LCD panel shipments should increase by 6 percent quarter over quarter to 184 million units. The company also said that its flat-panel television shipments should rise by about 10 percent compared with the second quarter.

 

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