Samsung reported operating profit of $5.9 billion and net profit of $4.5 billion for its June quarter, which saw it ship nearly twice the number of smartphones as Apple, as potential buyers of Apple’s phones and operators held off purchases in anticipation of a new iPhone this autumn. However, the company’s profits were well below those of Apple.
Samsung may have sold more smartphones, but the company’s net profit of $4.5 billion is half what Apple achieved in the same quarter. Apple saw $8.8 billion profits in the quarter that ended in June.
Samsung’s gross margin of 37% also lags Apple’s 43%, notes Reuters.
Samsung also makes TVs and other appliances, flat-screens, and chips, but its mobile phone business brings in around 60% of its earnings. The iPhone bought in 26% of Apple’s revenue in the last set of Apple’s earnings, although its impact on the bottom line will have been far greater, Apple recently revealed that it makes 58% profit from sales of the iPhone.
Another consideration, according to a Reuters report, is that even when the new iPhone launches, Samsung is likely to benefit as Samsung is the “sole producer of processing chips used to power the iPhone and iPad”, as well as mobile memory chips, NAND flash and display screens.
However, reports back in May suggested that Samsung had lost the contract with Apple. Samsung shares slipped after a report appeared claiming that Apple has switched its chip supplier to Elpida from Samsung. It is claimed that Samsung lost $10 billion of its market value following news that Apple switched suppliers.
And previously we reported claims that Apple had turned away from Samsung for the manufacture of its iOS processor chips. Samsung was the sole supplier of the A5 chips used in the iPad 2, but Apple has hinted it is keen to diversify its supply chain from the Korean company.
Also of note is the prediction by Strategy Analytics that smartphone shipments are slowing. Overall smartphone shipments rose 32 percent in the second quarter, their slowest pace since 2009’s 16 percent increase, according to Strategy Analytics. The research firm expects annual smartphone shipment growth to slow to 40% in 2012 from 68% in 2011 and ease further to 23% in 2013.
Samsung and Apple are locked in patent disputes in many countries, seeking to block sales of products in various markets including the US and Europe.
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Author: Karen Haslam, Editor
Macworld editor since 2008, Karen has worked on both sides of the Apple divide, clocking up a number of years at Apple's PR agency prior to joining Macworld almost two decades ago.
Karen's career highlights include interviewing Apple's Steve Wozniak and discussing Steve Jobs’ legacy on the BBC. Her focus is Mac, but she lives and breathes Apple.