Samsung Profits Drop But Comes out Swinging at CES
Samsung Electronics suffered a fourth-quarter dip, but is relying on the surging smartphone market and a recovery in its memory chip business to help with a rebound, according to this Reuters report.
The company is also facing fierce competition with global rivals to try and sell a new generation of TVs. Samsung estimated on Thursday that its fourth quarter profit would come in below market expectations. The company is now apparently pinning its hopes on reduced prices to stabilize the chips and panel sectors.
Analysts anticipate that this weak profit quarter is simply a blip in what will be a successful outlook for the company.
There are some lauding the company’s success in the tablet space. The Galaxy S Tablet is considered the first credible challenger to the Apple iPad and the company has also launched a few smartphones powered with Google’s Android (News - Alert) software.
"Samsung has successfully expanded into the smartphone and tablet PC segments," said Ahn Young-hoe, a fund manager at KTB Asset Management, in the Reuter’s piece. "Samsung is a totally different story compared to pure chip and display plays. Its diversified portfolio creates stable profits in the cyclical businesses."
Samsung signaled an aggressive push into “smart” at this week’s CES (News - Alert) and promised 3D TVs this year as it aims for a 15 percent jump in TV sales for 2011. The company has definitely pushed into the top global brand space with a market value of $136 billion to effectively compete with Sony, Nokia, Toshiba (News - Alert) and Panasonic.
The company’s shares jumped 25 percent since November and hit a record high on Monday when expectations of a recovery in profits were announced. Samsung continues to hold onto the number one position in TVs against Sony and Panasonic (News - Alert) and is also performing strongly against U.S. chip rival Micron Technology.
At CES this week, Samsung displayed a full range of products from smartphones to tablets to TVs. Like other players, Samsung talked Internet connectivity on the small screen trying to grab a bigger slice of the emerging market where there has yet to be a single dominate player.
Samsung hopes to quadruple sales of 3D TV sets to roughly 8-9 million units in 2011. At the same time, the company will aggressively promote Internet-enabled TVs. Sony, Sharp (News - Alert) and Panasonic are readying their own arsenal to compete in this space.
Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan’s articles, please visit her columnist page.
Edited by Jaclyn Allard