Samsung Predicts New Smartphones Will Fire Up Profits

With the Galaxy Tab and Wave phone coming, Samsung executives predict a healthy profit from the company's third-quarter mobile sales.

At the IFA consumer electronics show in Berlin, J.K. Shin, head of Samsung's mobile communications division, told journalists he expects the company's mobile business to reach a "double-digit" profit margin during the third quarter of 2010.

Samsung company executives also expect to ship 25 million smartphones in the same quarter. The company has high expectations for the mobile business following the Sept. 2 unveiling of the 7-inch Galaxy Tab device, running Android 2.2.

"We are prioritizing our Android platform," Y.H. Lee, the head of marketing at Samsung Mobile, told Reuters at IFA. "Android is very open and flexible, and there is a consumer demand for it."

At an event Sept. 16 in New York, Samsung will introduce its Media Hub application.

While the consumer electronics manufacturer had forecast 18 million in smartphone sales in 2010, the company is now projecting sales of 25 million smartphones.

While speaking to reporters, Shin explained that foreign exchange rates had contributed to a meager second-quarter profit margin.

Shin said he foresees a huge boost in the worldwide mobile handset market in the coming year. While he predicted that 1.2 billion units would be sold in the global mobile handset market in 2010, the number should go up to 1.3 billion units in 2011, he told reporters in Berlin.

Shin estimated that out of the total of global mobile handset shipments, 400 million of them would be smartphones in 2011, compared with 280 million smartphones in 2010.

Despite the predictions of growth for Samsung's mobile handset business, its mobile phone businesses declined in sales revenue by 4 percent in the second quarter of 2010. In addition, the company's operating profit margin slipped to 7.2 percent from 10.8 percent in the second quarter of 2009.

Still, the company shipped 63.8 million phones, compared with 52.3 million during the second quarter of 2009.

On Aug. 30 Samsung also released details about the Wave 723 (GT-S7230E) phone, which runs on the Bada mobile operating system. The phone will debut in September in Germany, then later in Europe, Southeast Asia, the Middle East and Africa.

Meanwhile, sales of the Android Galaxy S smartphone, unveiled in June, have already reached 1 million.