iPhone 5S, iPhone 6 Release Date Cause Lower iPhone Sales, Samsung Galaxy S4 On The Rise
The company Samsung Electronics, or the South Korean SEOUL, claimed past Friday that the profits made out of smartphone selling in the first quarter of 2013 went roof high and actually reached a new record in numbers, even though in April this year they launched the new flagship device Samsung Galaxy S4. More than that it seems that the rumors on the upcoming iPhone 5S and iPhone 6 caused Apple’s sales to go low, and might be one of the reasons why the smartphone sales of the Samsung company went so high.
Normally, in the first three months of the year, the sales in electronics (as in any other thing) slow down, especially because of the holiday shopping spree in December. However, analysts put this shopping delay on people’s desire to buy the latest models of their favorite smartphones, in this case on the release of the Samsung Galaxy S4. Even the Apple company has put the low number in sales for the older device models on the soon to come release of their iPhone 5.
The SEOUL company started to sell their new Galaxy S4 on the market from South Korea past Friday, and they’re going to start selling it in the United States next Saturday. If the Galaxy S4 sales go well, analysts expect the Samsung’s profit figures to go high again in the second quarter, maybe even in the third one as well. Even the top management of Samsung is confident that the sales of the Galaxy S4 is going to outreach those of the Galaxy S3, as the director in sales and marketing of the Samsung’s company stated the same before the release.
The SEOUL company stated last week that the profit made during the first quarter, more precisely in the time period January-March surpassed last year’s sales with 42%, from 5 trillion to 7.2 trillion ( meaning 6.5 billion dollars). These profits were made even with the one-shot charge settlement they made in order to end the intellectual property war they had with Apple. Even though we don’t know for sure, analysts claim that the estimated charge is somewhere around $600 million.
The sales went up with 17 percent, meaning winnings in value of 52.9 trillion. The operating profit went up to 8.8 trillion in winnings meaning 54 percent, aligned with the first results that they presented at the beginning of April.
Compared to the previous quarter’s results, the sales grew with almost 2 percent, thus outmatching the market’s expectations. Samsung also claimed that the sales of their Galaxy Note and those of the Samsung Galaxy S3, were strong thus bringing the company a lot of profit. Not to mention that they even spent less on marketing campaigns for the devices, unlike in the previous quarter when they had to surpass the competition.
In the first quarter of this year, the division that manufactures tablets, PC’s, smartphones or cameras more precisely Samsung’s IT and Mobile Communications team, had an operating revenue of 6.51 trillion which is 52% higher than last year’s first quarter, while it is also the biggest earnings since Samsung company decided to reorganize this team by merging the handsets and the PC departments.
Samsung went on a high variety of smartphones that came with different shapes, sizes and prices, and on other mobile devices that were globally requested, thus out-passing competition such as the Nokia Corporation and Apple Inc.
According to the market analysts, Samsung’s strike in sales records won’t end very soon, even though the Galaxy S4 came out a lot earlier than the Apple’s updated version of the iPhone 5.
Daewoo Securities head chief of technology department, James Song stated that this is like watching a snowball rolling down a hill. More than that, Song predicts the operating earnings of Samsung to go over 10 trillion ($9 billion) in the second quarter.
IDC the firm conducting market researches, claimed that the Samsung company sent overseas nearly 70.7 million mobile phones in the past quarter, a raise of 61% compared to last year’s first quarter and that their market share grew up to 33 percent. In the other corner, the rival Apple shipped 37.4 million iPhones, and according to IDC, their market share went down from 23 percent in 2012 to 17 percent this year.
The Samsung company, settled in South Korea’s Suwon is not only one of the biggest smartphone manufacturer but also the the biggest manufacturer of crystal display panels, memory chips and televisions in the world.
The high scores obtained by the SEOUL company on the smartphone market helped reduce the losses from a low demand in TV sets and the recovery of sales in the display panels area.
Furthermore, Samsung held back its investments on increasing the production lines for display panels and semiconductors, an action that was recurrent every year until now. This might be a sign that the company knows that the demand for display channels and memory chips isn’t going to grow very fast. The annual expenses in this area is going to stop at 22.9 trillion, nearly $20.5 billion.
Regarding the expenditure capital, Samsung claimed that they will invest more in the research and development area, even though they already are one of the companies that spend the most in this area. As the financial information publisher FactSet states, the expenses made by Samsung in the area of R&D was $2.97 billion in the first quarter of 2013, thus surpassing Apple’s expenses in this domain nearly three times, considering they only invested $1.12 billion.
Robert Yi, Samsung’s head chief of the investor relations department stated that even though the market is still suffering because of the financial crisis and the recovery is slow, they want to increase the expenses in the R&D area in order to make sure they will be ahead of their competitors new devices.
One of the analysts of the Korea Investment&Securities, Seo Won-seok stated that Samsung’s development depends on how much they invest in the research for manufacturing new devices, and even more on the investments they make when developing the teams that create electronic devices and their components.
Samsung exposed during a trade show held in Las Vegas, in January this year a few mobile devices with incorporated curved screens, meaning we will soon expect a flexible screen for our favorite smartphones. Not to mention that while refreshing the components through the use of a more advanced tech, the manufacturing expenses for memory chips are definitely going to decrease.
