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Samsung's Q4 profit rides high on Galaxy smartphones

Strong sales of its Android smartphones helped propel both revenue and profit for the Korean consumer electronic giant.

Caricaturist Kathy Bailey
Samsung has high hopes that its Galaxy Note will sustain the company's momentum in the mobile business. Pictured here is caricaturist Kathy Bailey, who sees digital art as a way to expand her business.
Jessica Dolcourt/CNET

Samsung Electronics reigned supreme among Android vendors in the fourth quarter, as its successful smartphone business helped drive an uptick in the company's fourth-quarter profit.

The Korean consumer electronics giant today reported a profit of 4 trillion Korean won, or $3.56 billion, up 8.5 percent from a year-earlier profit of 3.42 trillion Korean won.

The company's revenue advanced more than 13 percent to 47.3 trillion Korean won ($42.15 billion).

Propelling Samsung's profit and revenue was its mobile devices business, which saw tremendous success with the Galaxy line of Android smartphones. The Galaxy S II continues to be a hit around the world, including strong demand at U.S. carriers such as T-Mobile USA and AT&T. It also recently launched the Galaxy Nexus, the first smartphone running on Android 4.0, also known as Ice Cream Sandwich.

The telecom unit saw a 52 percent increase in sales and 79 percent jump in profit.

It's been a quick ascent in the mobile business for Samsung, which was slower than other vendors in moving to smartphone, but has made up for it with a rapid advance in its designs and features. In the third quarter, Samsung overtook Apple in smartphone shipments, but Apple has since taken back the crown in the fourth quarter, thanks to the debut of the iPhone 4S.

Apple narrowly edged Samsung for the lead in the fourth quarter, according to Strategy Analytics.

Samsung's success is a stark contrast from the other Android players. Motorola Mobility, for instance, yesterday reported a loss in the fourth quarter amid continued competitive pressure, while HTC has struggled in recent months.

While Samsung warned of a seasonal slowdown in the first quarter, the company expects the smartphone business to grow by more than 30 percent this year, offsetting its older feature phone business, which faces increasing pricing pressure. In addition, Samsung expects the tablet market to expand, driven by more competitively priced mass-market models. So far, the company's Galaxy Tab line of tablets have been sold competitively with Apple's iPad, unlike other more budget-friendly products like the Amazon Kindle Fire.

"The company's main focus remains smartphones with it targeting multiple operating systems and all segments and markets," said Oppenheimer analyst Ittai Kidron. "Feature-phone development is primarily for emerging market opportunities."

Samsung's display, television, and digital appliances businesses also saw revenue growth, as television sales were helped by its newer smart LED units. Despite a slight revenue decline, Samsung's chip business also saw a jump in profitability for the period.

Overall TV sales will be driven by demand from the emerging markets, as well as newer LED TV sets, including ones introduced at the Consumer Electronics Show that allow for voice and gesture controls.