Money Matters - Simplified

Galaxy S III Steers Samsung to Record Profit

Samsung marked a record profit of $5.9 billion in the second quarter; all thanks to soaring demand of Galaxy S III.

It’s raining success for South Korean smartphone giant Samsung which, as per second quarter reports, is well placed in the lap of sales and profits.

Taking an absolute advantage of skyscrapping demands for its Galaxy S III model, Samsung Electronics registered a record profit of $5.9 billion in the second quarter of 2012. The Company will shortly make public its detailed sales report for the quarter.

Sales likely to increase even further
However, there is much more to the dazzling success of the world’s largest smartphone maker, by sales, as analysts are expecting Samsung’s earnings to spike up even higher during the quarter in progress. There are speculations looming all over the market regarding a dramatic increase in Samsung’s sales of Galaxy S III, the high-end smartphone whose shipment will glide way over 19 million during this quarter.

Weak Euro still playing spoilsport
Despite the substantial increase in sales, Samsung is sweating bullets over the ongoing European debt crisis. The fragile Euro zone is denting Samsung’s sales of televisions, chips and home appliances, a domain that has forever seen Samsung’s monopoly in the global market.

The Company is, no doubt, losing its market hold in the said segment due to weak demands, weak prices, and a very weak Euro which seems like gorging over the more-than-double profit driven by Galaxy S III. It gives an impression that Samsung is winning small battles but losing the all-important war of domination in the electronic market.

“Our smartphones are flying off the shelves, with some outlets reporting 40-60% sales growth, but that's distorting the overall trading outlook,” admitted Samsung executives.

The Company’s shares collapsed drastically as investors, being mindful of longstanding business basics, were going jittery regarding the momentum of Samsung’s earnings reaching a possible peak. After all, every peak ends with a downfall.

The Apple Impact
Samsung’s sage of profit may well reach its climax later this year as Apple, the iPhone prodigy, is expected to roll out a new iPhone then. But still, Samsung will have something to play for as the launch of next iPhone will boost the sales of Samsung’s semiconductors which are used by the Californian IT major to power its iPhone and iPad.