Samsung Posts Record Profits

Samsung Mobile Phones

Samsung has today posted record quarter two profits, driven largely by sales of its smartphones.

Net profit for the period April to June 2013 was a staggering £4.5bn, up 50% from 2012 and coinciding with the launch of the company’s flagship Galaxy S4 smartphone. Indeed the mobile arm of the company, which includes smartphones and tablets, represented around 65% of the company’s quarter two operating profit.

However analysts predict that this period may represent a peak in the Samsung’s smartphone sales and have posted warnings about its reliance on this division to boost profit. This outlook appears to be shared by the market, with Samsung’s share price dropping 14% since January.

With the Android market dominated by Samsung, the fear among investors is that there’s little room for manoeuvre. Emerging markets are flocking towards cheaper Android handsets, which don’t product the same profit margins. So where does the company go from here?

Infrastructure appears key to the Korean firm’s strategy, with investment in the production of its OLED displays, memory chips and processors already confirmed. A relentless desire for innovation across its sectors also remains central to boosting sales, with curved and flexible phones in the pipeline for 2014.

Written by Damian Carvill