Samsung's 3Q Results: The Good, the Bad and the Ugly

By Cindy Waxer October 29, 2010

Despite softening demand for PCs and televisions, Samsung Electronics, a manufacturer of computer memory chips, announced revenues of 40.23 trillion Korean won for the third quarter ending Sept 30, 2010, a 12-percent increase year-on-year. The figure tops the previous record for quarterly revenue of 39.25 trillion won recorded in the fourth quarter of 2009. These figures mark Samsung’s third straight record net profit.

“In the third quarter, Samsung faced a challenging business environment including declining demand for PCs and TVs, along with a continued economic slowdown in developed markets such as U.S. and Europe,” said Robert Yi, vice president and head of Samsung Electronics’ Investor Relations Team. “Despite this, we achieved strong revenue growth and profitability, which was built upon our cost competitiveness in memory semiconductors and increased sales of cutting-edge products such as our latest smartphones.” 

In fact, sales of mobile phone handsets rose 19 percent from a year earlier to 71.4 million units.  Average sales price also increased 14 percent quarter-on-quarter. The rollout of Samsung’s flagship smartphones, Galaxy S and Wave, were the primary drivers of continued sales growth. Since its launch in June, Galaxy S has been rolled out in 90 countries and has been selected by 210 carriers worldwide. Samsung projects sales of 10 million units by the end of 2010. The Samsung Wave, which operates on Samsung’s open smartphone platform, bada, has also shipped more than two million units in 80 countries. The quarter was also marked by the launch of Samsung’s Android-powered Galaxy Tab, which will be available on 140 carriers globally including all four major service providers in the United States. 

That’s not to suggest that Samsung hasn’t experienced diminishing sales as well. The company reported that large-size panel shipments fell quarter-on-quarter to 160 million units from 167 million, including both TV and IT panels. Average sales prices for notebook PC, monitor and TV panels all witnessed declines. And Samsung warns that demand for TV and monitor panels is expected to remain weak in the fourth quarter. Still, the company is banking on an increased demand for notebook panels stimulated by growing tablet PC sales to counterbalance changes in consumer demands.  




Edited by Tammy Wolf

TechZone360 Contributing Editor

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