Samsung is estimating a record profit for Q2 this year, at $8.3 billion, it is one of the highest profit margins we have seen from any electronics company and will be second only to Apple with an apparent $9.5 billion net profit this quarter. However, Samsung is definitely drawing in more revenue from its vast line of electronics and we suspect the company is looking into ways to grab more profit in other electronic areas.
Even with this huge extension, Samsung has still missed its early analyst estimates and shareholders are starting to worry the pace of Samsung’s electronic line, especially in mobile, is starting to slow. This is bad news for Samsung, especially given how hard Apple was hit on the stock market due to the iPhone stalling its progress slightly.
It is fair to say Samsung has really expanded the mobile business and has been one of the biggest reasons why Android is a success. The Galaxy S and Note line have been incredibly successful, but it is Samsung’s manufacturing brawn and having a different phone for every type of customer that has really boosted their mobile business to rival the iPhone.
With this huge expansion we have seen many other mobile partners join Android to try and get their own market share, HTC has faired worse, coming from a 40% hold of Android down to 20%, Sony has been dwindling around 10% and Huawei, ZTE, Motorola, LG and other Chinese partners take up the rest.
Samsung did have the upper hand with the Galaxy S3, many review sites said it was the phone of the year, beating the iPhone 4S, but now Samsung have problems and the Galaxy S4 has not faired as well. The HTC One is currently the best phone out and the Nokia EOS, iPhone 5S and Moto X are all powerful contenders for that top spot.
This could be bad for Samsung’s growth, even though their marketing and availability reaches to areas other manufacturers are not even selling in. This is one of the main reasons the Galaxy S4 has achieved 20 million sales in under 2 months, even though there are better devices out there.
The $8.3 billion quarter profit shows how much the mobile business means for Samsung and we suspect with the Galaxy Note 3 coming soon the company will be able to bring their profits up even more. Samsung normally do better in the third quarter, with the Galaxy S line price normally dropping and millions buying the new Galaxy Note phablet.
We believe Samsung will continue with their strategy to offer something for everyone, in almost every electronic area. The company not only sell phones, they sell the inside of phones to different companies, including Apple. The realisation is Samsung is trying to dominate in every electronic market and we wouldn’t be surprised to see a Google Glass clone and smartwatch in the near future.