Samsung Electronics shipped 70 million mobile handsets in the first quarter, up 9 percent from the year-earlier on continued strong demand for smartphones. While total shipments were down 14 percent from the fourth quarter due to seasonality, smartphone shipments still improved 16 percent versus Q4. Samsung said it saw continued strong sales of its high-end models such as the Galaxy S and WaveII and increased shipments of new mass-market models such as the Galaxy Ace, Galaxy mini and Wave525. The average selling price was up versus Q4 to over USD 120, as the portion of smartphones in total shipments increased to 18 percent from 14 percent. Total sales at Samsung's Telecom division, which also includes its network equipment business, rose 19 percent year-on-year in Q1 to KRW 10.64 trillion. Operating profit improved to KRW 1.43 trillion from KRW 1.10 trillion, and the margin was up 1.2 percent points to 13.5 percent. Samsung forecast a slight sequential increase in handset shipments for Q2, led by smartphones and emerging markets. In the tablet market, it expects competition to intensify as more models are launched. The company aims to outperform the overall market, led by the launch of new devices such as the Galaxy S II, a 4G smartphone in the US and the Tab 10.1, as well as a growing number of smartphones for different price points. Samsung forecast the handset market will grow around 10 percent this year, led by 30 percent growth in smartphones. Samsung's total sales in the first quarter were up 7 percent from a year earlier to KRW 36.99 trillion, while operating profit fell 33 percent to KRW 2.95 trillion. Net profit dropped 30 percent to KRW 2.78 trillion. The lower results were due to weak demand in the PC market, leading to a drop in profit at the semiconductor division, and losses at the LCD panels unit. Samsung said that the "challenging business conditions" will persist in the second quarter, due to lingering worries over the global economy and tight competition in consumer electronics and mobile. However, most of its divisions are expected to report improved results.
