Samsung posts record profit

Samsung posted a fourth straight record quarterly profit, of $7.4 billion, earning around a fifth of South Korea’s GDP.

The company had strong sales of its Galaxy range of phones even though sales of its memory chips slowed down.

The company said the record run will end in December, as profit growth slows next year because of stagnating TV markets and growth in high-end smartphones dries up. Profit is expected to grow 16 percent next year, down from a forecast 73 percent this year.

Reuters reports that Samsung is dependant on the growth of its smartphones and if this momentum slows down it will be difficult to maintain such a high profit margin.

Samsung sold 56.3 million smartphones in the third quarter and has a global market share of 31.3 percent. This is double that of Apple, which said it sold 26.9 million iPhones.

Samsung has a lot of strong businesses like tablets, OLED TVs and micro-processor chips that could become its next big thing and step it up to the next level. It is also looking at a new range of mobile products, such as the Ativ tablets using Microsoft’s Windows 8.

The company does not seem too concerned about Apple, which was its its largest supplier, heading off to pastures new. Last week it even stopped supplying displays for the iPhone, and has a reduced role in the iPad panel – down to 26 percent this quarter from 38 percent a year ago.

What is worrying for Samsung is that the third-quarter profit at Samsung’s chip division, which competes against Toshiba and Hynix, dropped 28 percent as prices of dynamic random access memory (DRAM) chips sagged. A recovery in NAND flash chip helped offset the weakness, Samsung said that the DRAM oversupply to run on into the current quarter.

It predicted this holiday season would be poor as US and Europe won’t be spending much over Christmas because of the poor economic circumstances.