Most companies on the planet do not turn over $5 billion a year. To be honest, most companies won’t turn over $5 billion over the entire course of their existence. Right now, things are bubbling up nicely for Samsung and its starting to bang in some serious numbers. KitGuru gives the Korean giant’s skirt a little lift to see what goes on underneath.
There are many ways of knowing how well a company is doing. Recruiting new personnel is a good sign. Another is being chosen as the chip producer for the fastest growing tech market in the world. Posting big revenues is one of the bog ones, but the underlying profit is more telling.
Right now, Samsung’s starting to glow brightly in the most important market of all – mobile computing and communications – and it seems to be banging in all the right numbers in all the right places.
Analysts like Choi Yeon LIG Securities and Investments believes that the $5 billion in profitable change that Samsung seems to have banked from 1st January to 31st March 2012, is down to one area in particular.
“While revenue was in line, there was a big surprise in profit. That suggests stronger-than-expected profit from the handset division”, he said.
“That’s thanks to robust sales of high-end models like the Galaxy S and Note,” he explained. “”Handset margins are now estimated to have topped 20%”.
KitGuru takes a global view of such numbers and there’s another non-product factor that needs to be remembered. Samsung is a massive producer of memory and a combination of overall increased requirement from the market (think about how many PCs are now advertised with 8GB or 16GB as standard) and the wobble that KitGuru recently reported over at Elpida, may well have combined to create an upsurge in memory prices.
Any upsurge, in a market with so much volume, would have a significant impact on the big numbers. We’re not saying that Choi is wrong, but he may well have been seduced by the glamour of the galaxy family.
KitGuru says: While a lot is being made of the upcoming battle or the super smartphones ahead of the London Olympics, you need to remember that Apple has huge market share and everything to lose with iPhone 5, while Samsung has been a bit-part player in the phone market – so any success for its new models will look like a win.