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Samsung smartphone growth helps mobile market

Feature phone sales are down as smartphone sales grow
Fri Jul 29 2011, 12:45

KOREAN ELECTRONICS GIANT Samsung is shipping 10 per cent more smartphones than a year ago, helping the overall mobile phone market grow by 11.3 per cent in the second quarter of this year, according to IDC.

The mid to high-end segments of the smartphone market were Samsung's strongest performing areas, thanks to its flagship models the Galaxy S and Galaxy S II. All regions showed increased demand and shipments.

Mass-market models, such as the Ace, Mini, and Gio showed increased sales too, while Samsung's Galaxy Tab tablets also sold well.

Samsung expects both the smartphone and tablet markets to continue to perform strongly in the next two quarters. It predicts a 19 per cent increase in demand for smartphones in the second half of the year.

Samsung's market share decreased slightly from 19.4 per cent a year ago to 19.2 per cent last quarter. This is still a fairly healthy position, however, and close to four times the 5.6 per cent market share of its rival, Apple.

IDC reports that the global mobile phone market increased 11.3 per cent in the second quarter, slightly less than the 13.3 per cent it predicted. It's also a fair bit less than the 16.8 per cent increase seen in the first quarter this year.

Samsung reported a slight decrease in shipments of feature phones compared to the previous quarter, supporting IDC's findings that the feature phone market shrunk by four percent compared to the same time last year.

The decline in Samsung's feature phone demand will recover somewhat in the second half of the year with an increase of 14 per cent, largely due to the holiday season. Samsung also expects overall growth of 15 per cent for mobile phones in the second half of the year, with single-digit growth predicted for the third quarter.

Despite Samsung's strong performance in the mobile sector, it reported a decline of 25 per cent in operating profit and an 18 per cent decline in net profit. The lower profit was largely due to low chip prices.

At the time of writing, Samsung's share price is up by 7,000 won (£4.07) to 844,000 won (£491.36), an increase of 0.84 per cent. µ


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