Samsung posted record profits of 7.8tn won in the second quarter of 2013, up by 51 percent on the same period in 2012, helping it become the world’s most profitable smartphone maker ahead of Apple.
The huge profits, equivalent to £4.5bn, were driven by the success of devices such as its flagship Samsung Galaxy S4. In total, device sales accounted for 2.92tn won in operating profits, up from 1.69tn won in the first quarter of 2013, a rise of 58 percent.
Consumer electronics sales also rose by a whopping 83 percent while semiconductor (64 percent) and display panels (46 percent) also performed strongly compared to the first quarter. The only blip came from the IT and mobile communications division, where profits dropped by three percent.
The firm said this was due to “escalated investments in R&D and in distribution channels” as well as new product launches in the division.
Head of investor relations, Robert Yi, said the firm hoped to continue the strong growth in the coming quarters, but could not rule out being affected by ongoing economic issues across the globe.
"Entering into a typically strong season for the IT industry, we expect earnings to continue to increase. However, we cannot overlook delayed economic recovery in Europe and risks from increased competition for smartphone and other set products," he said.
"We expect to improve profit yields in the second half due to high-margin, differentiated component products, as well as gains stemming from increased smartphone and TV shipments."
Despite the note of caution, market watchers Strategy Analytics said the earnings from Samsung pointed to a huge rise in the profitability of its smartphone devices, powering it past Apple for the first time, according to analyst Neil Shah: “We estimate Samsung’s operating profit for its handset division stood at $5.2bn in the second quarter of 2013. Samsung overtook Apple for the first time, which recorded an estimated iPhone operating profit of $4.6bn.”
“With strong volumes, high wholesale prices and tight cost controls, Samsung has finally succeeded in becoming the handset industry's largest and most profitable vendor.”
The comments come as the firm released its own market share report, which placed Samsung as the number one firm for shipments of devices, ahead of Apple, followed by LG, ZTE and Huawei.
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