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Cheap phones propel Samsung to record profits, but is Galaxy S4 demand waning?

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The grass remains green for Samsung

The champagne corks are popping once again in Seoul as Samsung celebrates yet another quarter of record profits, with its mobile division continuing to make the headlines.

The company has announced profits of $9.6 billion (£5.9bn) for the three months ending September 2013, which is up 26 per cent from Q3 2012. If you’re talking sales? Well the company sold $55.1 billion (£34.1bn) in gear during the period.

Naturally, it’s smartphones and tablets contributing the most to the bottom line, with profits of $6.7 billion (£4.1bn) which was also up on the previous year.

However, it’s the demand for the company’s lower-end, cheaper devices in emerging markets that have pushed the profits up for Samsung rather than newer, high-end devices like the Galaxy S4 and Galaxy Note 3.

Despite the company touting sales of 40 million Galaxy S4 handsets in the first six months on sale, it is thought that the demand for the handset has fallen in the last couple of months.

Samsung also enjoyed a profitable period with its chip division which doubled its profits from a year ago, adding $1.93 billion (£1.2bn) to the bottom line. That amounts to the company’s best performance in that division in the last three years, despite fears that the company’s massively profitable relationship with Apple for iOS devices may be on the outs following the endless legal battles between the two.

For now, at least, the good times are continuing to roll at Samsung, as other Android manufacturers and the likes of Nokia and BlackBerry struggle to even break even.

The perceived decline in demand for its top end smartphones is starting to sink in with investors and analysts and it may not be all roses and sunshine this time next year.

Via CNET

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