Samsung Q1: Smartphone Sales Up 56 Percent, Income Up 42 Percent
No one told Samsung that the smartphone market is growing saturated and the global economy isn't in perfect health. While major rival Apple this week posted its first profit slip in a decade, on April 26 Samsung announced a 42 percent year-over-year increase in its net income, for a first-quarter 2013 total of approximately $6.4 billion.
Samsung sold 69.4 million smartphone during the quarter—a 56 percent annual increase and nearly double the 37.4 million iPhones (up 7 percent year over year) that Apple moved during its most recent quarter.
And that was all ahead of the worldwide launch of the Galaxy S 4, which will be available from seven U.S. carriers at the end of the month.
In a smartphone market in which for a time Apple seemed to have no real rivals, Samsung came up fast on Apple's heels and has since shot by, leaving the iPhone maker to take notes.
Samsung proved that consumers want large—very large—screens, more than one device per year to choose from and a number of carriers to buy from. Samsung also taught Apple that if it leaves consumers waiting through multiple seasons for a new iPhone, Samsung will happily fill in those gaps.
With its the iPhone 5, the sixth generation of the device, Apple for the first time increased the screen size. Apple is also rumored to be working on a less expensive iPhone version that will enable it to compete in markets where Samsung currently has a considerable portion of the pie to itself, and it's expected to introduce its next-generation iPhone sometime this summer—whereas supply issues have pushed previous iPhone models into a deep-autumn release.
Research firm Strategy Analytics announced April 26 that global mobile phone shipments during the first quarter reached 373 million units—a 1 percent dip, annually.
Senior Analyst Neil Shah blamed "ongoing macroeconomic challenges in Asia, Europe and North America, relatively tighter operator upgrade policies for 3G phones and slowing volumes of 2G feature phones" for the decline.
Shah added that "Samsung was the star performer" of the quarter, capturing a record 29 percent share of all phones shipped worldwide, up from 25 percent a year ago.
Apple's share, meanwhile, inched from 9.3 percent to 10 percent, while Nokia's fell from 22 percent to just under 17 percent.
Apple CEO Tim Cook, during Apple's April 23 earnings call, emphasized the positive.
"Our revenue for the first half was over $98 billion, and our net income was over $22 billion. During that time, we sold 85 million iPhones and 42 million iPads," he said. "These are very, very large numbers, unimaginable to us just a few years ago."
But Cook also acknowledged some changes, and their cause.
While pointing to various market conditions during the call, answering an analyst question later, Cook acknowledged the competitive landscape.
"Of course, today our toughest competitor from a hardware point of view would be Samsung, married to Google on the operating system side," he said.
"They are obviously tough competitors," Cook continued, "but we feel that we have the best products so far, and we are continuing to invest in innovative products. We feel really, really confident about our product pipeline in both hardware, software and also our services. ... I feel very good about our competitive position."