It has been a good week for Samsung. The 2013 International CES saw the company lavished with attention as it took the lids of multiple attention-grabbing products. All that's left now is for the South Korean company to top its billion-dollar cake with a cherry.
Ahead of its full earnings release on Jan. 25, Samsung reported a record-setting $8.3 billion profit for the fourth quarter of 2012. That brings the company up to an unprecedented five record quarters in a row, sparking some concern that the pace is unsustainable.
"Investors are a bit concerned that Samsung's momentum may slow in the first half. The smartphone market is unlikely to sustain its strong growth as advanced markets are nearing saturation despite growth in emerging countries," said Kim Sung-soo, a fund manager at LS Asset Management.
Samsung's record fourth quarter was propped up by sales of the Galaxy Note 2, which sold around 8 million units. The best-selling Galaxy S3 continued to run up large numbers, though its shipments fell to 15 million units from the previous quarter's 18 million units.
The company's success is largely attributed to its extremely diverse portfolio of smartphones. The company offered 37 different kinds of smartphones, ranging from high-end to budget-friendly wares in 2012. The next closest competitor, LG, offered 24, while Cupertino-based rival Apple delivered only one, the iPhone 5.
"The Note was selling well, boosting fourth-quarter profit, while iPhone 5 sales were less than expected," said Song Myung-sub, an analyst at HI Investment & Securities. "Samsung's profit will drop in the current quarter because of decreased phone profits. It will launch the Galaxy S IV only in March or April, so, without new models, phone sales prices will fall this quarter. For the whole year, Samsung will launch new models faster than Apple and have the upper hand in the smartphone market."
While its smartphones accounted for a big portion of Samsung's success, they aren't responsible for all of it. The company is also a major chip and parts supplier (with Apple as one of its biggest customers), and it benefited from the rising sales of competing mobile phones incorporating its processors and screens.
