Samsung Profits Drop, Saved Only By Smartphones And Tablets

Apr 29, 2011
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Samsung reported a 30 percent drop to $2.6 billion in their Q1 2011 profits when compared to the same quarter last year. The Korean electronics manufacturer blames the dip on falling chip prices and slowing display sales. What's kept going strong, is there smartphone sales, including its Galaxy S series, which have jumped 18 percent from the previous year.

According to recent NPD report, Samsung takes the lead in the U.S. smartphone market with a 23 percent market share, followed by LG and then Apple. Samsung's semiconductor division that supplies tablet components and other devices is also doing well with a 70 percent increase. However, despite the success in smartphones and tablet components, Samsung gives a cautious forecast:

We forecast that the challenging business conditions will persist in the second quarter, effected by lingering worries over the global economy and tight competition in consumer electronics and mobile businesses

Samsung is also in the midst of a legal battle with Apple. Despite being Apple's major components supplier, Samsung has been slapped with a patent suit from Apple saying that their Galaxy series smartphones and tablets intentionally copy the look and feel of the iPhone and iPad. Samsung has fought back with its own patent suit, and adding one more just recently.

With Samsung's other divisions, such as its LCD panels, TVs, and PC components, failing to perform, it will be important that they protect their smartphone and tablet division with the onslaught of rivals while battling Apple over patents.

[via MobileDia]


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