According to Reuters, the July-September period saw a 44 percent jump in shipments for Samsung and it looks like there will be even stronger sales in the current quarter.
That is pretty impressive given that Samsung only entered the smartphone market last year and the outfit is being sued by Apple in a bid to stop all competition by any means possible.
Analysts say that the reason Samsung has done so well is because of its sleek production system that rapidly brings new products to market. The only rival it has is the iPhone 4S which is nearly a year out of date.
Kim Hyun-joong, a fund manager at Midas Asset Management, said it is fairly clear that the next few months will see Apple and Samsung dominating the market.
Profits from the South Korean firm’s telecoms division, more than doubled from a year ago to a record $2.2 billion and accounted for 60 percent of Samsung’s total profit. The move saved Samsung’s bacon as it saw a plunge in earnings from its memory chip operations.
Research outfit firm Strategy Analytics said that shipments of smartphones increased to 27.8 million units, up nearly four times from a year ago.
However Apple’s iPhone sales shrank by 16 percent to 17.1 million units in the third quarter. Samsung had 23.8 percent of the global smartphone market in the third quarter, nine points higher than Apple.
Apple sold fewer phones in the third quarter, as punters held off buying iPhones until the October launch of the iPhone 4S. It is not sure if that phone will hold up to expectations either, as it is not the iPhone 5 that many users expected, and there is some better and cheaper technology out there now.
Samsung said its fourth-quarter earnings could be better than the third, boosted by one-off gains from its $1.4 billion sale of its hard disk drive business to Seagate Technology.
Robert Yi, head of Samsung’s investor relations, told analysts that he was confident about the fourth quarter when industry demand is traditionally at its peak. It is hoping that sales of mobile devices to remain strong and flat-panel TV shipments to increase.
What might be helping Samsung is the fact that its gross margins are much lower than Jobs’ Mob. Apple has a 40 percent gross margin while Samsung’s phone division runs on a 16.9 percent operating margin.
What will make a difference next year is the impact of Nokia which is fighting back with its first phones based on Microsoft’s Windows software. Sony, which announced yesterday that it would take full ownership of its mobile venture, Sony Ericsson, might breathe a bit of life into the company.