Apple drops to third by revenue after South Korean company announces strong growth in phone handsets division
The Samsung Galaxy tablet is at the centre of a global patent battle between the South Korean company and Apple. Photograph: Odd Andersen/AFP/Getty Images
Samsung zoomed past Apple to take the smartphone crown in the third quarter, and become the biggest mobile phone maker by revenue, after it announced strong growth in its handset division as part of its quarterly results.
The company also said it expects strong sales of its smartphones in the coming quarter, with new models backed by Google due to debut in the UK and elsewhere during November.
The company was pipped though by Nokia, which remains the world's largest seller of mobile handsets by volume. Apple meanwhile has dropped from being the biggest smartphone maker and mobile phone company by revenue in the second quarter to rank behind Nokia and Samsung in revenue.
Although Samsung declined to give figures for its smartphone or feature phone sales, Jae Lee, a Daiwa Securities technology analyst, estimated that in the third quarter it sold 28m smartphones – well above Apple's figure of 17m for the period.
In the second quarter, Apple was reckoned to have just outdistanced Samsung with 20m iPhones sold, but saw a rapid slowdown in the third quarter as would-be buyers awaited a new model, while Samsung piled on the pressure.
The two companies are locked in a series of legal battles around the world over alleged patent and "trade dress" infringements relating to the iPhone, Samsung's phones and the iPad and Samsung's Galaxy range of tablets. Samsung did not give any indications about tablet shipment figures for the quarter in its earnings release.
The company said its telecommunications business hit a record in quarterly sales of 14.9 trillion won (£8.37bn), a 37% increase from last year, with growth mainly due to strong Galaxy smartphone sales. Operating profit hit 2.52tn won, a new record for the divison.
Nokia previously announced that it had shipped 107m handsets in the period, generating €9bn (£7.9bn) of revenues. Apple had mobile revenues of $10.98bn (£6.8bn) for the quarter.
The Korean electronics company said quarterly net income fell by 23% year-on-year to 3.44tn won following weaker demand for its flat panels and computer chips – of which it is the world's biggest manufacturer. Group revenues grew by 3% to 41.27tn won.
A Samsung spokesman, Nam Ki-yung, wouldn't comment on whether Samsung had passed Apple in smartphone sales, saying the company no longer provides its sales figures for handsets. Samsung did say, however, that handset shipments jumped more than 20% from the previous quarter, and that its global smartphone sales were up fourfold from last year.
For the period last year, the research company Gartner calculated that Samsung shipped a total of 71.7m handsets; a 20% rise would indicate that it shipped just over 86m in the three months from July to September.
The company's display panel business suffered a quarterly loss of 90bn won and its revenue of 7.08tn won was down 13% from a year earlier. Samsung's semiconductor businesses had sales of 9.48tn won, a drop from last quarter.
"Looking ahead into the fourth quarter, when industry demand is traditionally at its peak, Samsung expects sales of mobile devices to remain strong and flat panel TV shipments to increase," the company said in a statement.
Samsung also said the third quarter saw increased demand for flash chips used in mobile devices and enhanced revenue in the business that creates mobile application processors and image sensors.
The gains in smartphones came despite the South Korean electronics giant being locked in a global patent battle with Apple, which began legal action in April against Samsung for what it says is uninhibited copying of its iPhone and iPad designs.
Apple says the product design, user interface and packaging of Samsung's Galaxy devices "slavishly copy" the iPhone and iPad. Samsung fought back with lawsuits of its own, accusing Apple of patent infringement of its wireless telecommunications technology.
Earlier this month, Samsung asked Japanese and Australian courts to block sales of Apple's new iPhone 4S in those countries over alleged patent violations. They have not so far done so. Samsung is also appealing against an Australian court's decision to temporarily ban sales of Samsung's new Galaxy tablet computer.
In an attempt to win sales in the market between smartphones and tablet PCs, Samsung on Friday unveiled a new Galaxy Note, the Yonhap news agency reported.
The Galaxy Note is smaller than tablet computers but offers the same features as other wireless devices with applications. Its 5in screen is bigger than the Galaxy S2 smartphone, and a digital pen can be used to write on the screen, Samsung said.
Yonhap says the Note will debut in Europe next month and then later in China, South Korea and other Asian countries.
The company also said it expects strong sales of its smartphones in the coming quarter, with new models backed by Google due to debut in the UK and elsewhere during November.
The company was pipped though by Nokia, which remains the world's largest seller of mobile handsets by volume. Apple meanwhile has dropped from being the biggest smartphone maker and mobile phone company by revenue in the second quarter to rank behind Nokia and Samsung in revenue.
Although Samsung declined to give figures for its smartphone or feature phone sales, Jae Lee, a Daiwa Securities technology analyst, estimated that in the third quarter it sold 28m smartphones – well above Apple's figure of 17m for the period.
In the second quarter, Apple was reckoned to have just outdistanced Samsung with 20m iPhones sold, but saw a rapid slowdown in the third quarter as would-be buyers awaited a new model, while Samsung piled on the pressure.
The two companies are locked in a series of legal battles around the world over alleged patent and "trade dress" infringements relating to the iPhone, Samsung's phones and the iPad and Samsung's Galaxy range of tablets. Samsung did not give any indications about tablet shipment figures for the quarter in its earnings release.
The company said its telecommunications business hit a record in quarterly sales of 14.9 trillion won (£8.37bn), a 37% increase from last year, with growth mainly due to strong Galaxy smartphone sales. Operating profit hit 2.52tn won, a new record for the divison.
Nokia previously announced that it had shipped 107m handsets in the period, generating €9bn (£7.9bn) of revenues. Apple had mobile revenues of $10.98bn (£6.8bn) for the quarter.
The Korean electronics company said quarterly net income fell by 23% year-on-year to 3.44tn won following weaker demand for its flat panels and computer chips – of which it is the world's biggest manufacturer. Group revenues grew by 3% to 41.27tn won.
A Samsung spokesman, Nam Ki-yung, wouldn't comment on whether Samsung had passed Apple in smartphone sales, saying the company no longer provides its sales figures for handsets. Samsung did say, however, that handset shipments jumped more than 20% from the previous quarter, and that its global smartphone sales were up fourfold from last year.
For the period last year, the research company Gartner calculated that Samsung shipped a total of 71.7m handsets; a 20% rise would indicate that it shipped just over 86m in the three months from July to September.
The company's display panel business suffered a quarterly loss of 90bn won and its revenue of 7.08tn won was down 13% from a year earlier. Samsung's semiconductor businesses had sales of 9.48tn won, a drop from last quarter.
"Looking ahead into the fourth quarter, when industry demand is traditionally at its peak, Samsung expects sales of mobile devices to remain strong and flat panel TV shipments to increase," the company said in a statement.
Samsung also said the third quarter saw increased demand for flash chips used in mobile devices and enhanced revenue in the business that creates mobile application processors and image sensors.
The gains in smartphones came despite the South Korean electronics giant being locked in a global patent battle with Apple, which began legal action in April against Samsung for what it says is uninhibited copying of its iPhone and iPad designs.
Apple says the product design, user interface and packaging of Samsung's Galaxy devices "slavishly copy" the iPhone and iPad. Samsung fought back with lawsuits of its own, accusing Apple of patent infringement of its wireless telecommunications technology.
Earlier this month, Samsung asked Japanese and Australian courts to block sales of Apple's new iPhone 4S in those countries over alleged patent violations. They have not so far done so. Samsung is also appealing against an Australian court's decision to temporarily ban sales of Samsung's new Galaxy tablet computer.
In an attempt to win sales in the market between smartphones and tablet PCs, Samsung on Friday unveiled a new Galaxy Note, the Yonhap news agency reported.
The Galaxy Note is smaller than tablet computers but offers the same features as other wireless devices with applications. Its 5in screen is bigger than the Galaxy S2 smartphone, and a digital pen can be used to write on the screen, Samsung said.
Yonhap says the Note will debut in Europe next month and then later in China, South Korea and other Asian countries.
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