Record profits spark Samsung spending spree

Samsung posted a record $4.7 billion (£3bn) quarterly operating profit, driven by booming smartphone sales, and will spend $22 billion this year to boost production of chips and flat screens.

Record profits spark Samsung spending spree

The South Korean company, the world’s top technology firm by revenue, is locked in competition with Apple in the smartphone market.

Apple, overtaken by Samsung in the third quarter, regained its crown as the world’s biggest maker of smartphones in the fourth quarter, with record sales of just over 37 million iPhones.

Samsung didn’t give its own sales volume data, but research firm Strategy Analytics put sales at 36.5 million smartphones in October to December, with third-ranked Nokia on 19.6 million.

Samsung’s telecoms business earned a record 2.64 trillion Won profit (£1.5 billion) in October to December on increased sales of its flagship Galaxy smartphones.

“The battle of the two big smartphone powers, Apple versus Samsung, will go on,” said Baik Jae-yer, fund manager at Korea Investment Management.

“The smartphone market will expand this year to more mid-and low-end models that are affordable to the wider public,” Baik said. “Rather than focus on market share, I’d point out the strong contribution of Samsung’s handset business to earnings growth and margins.”

Samsung will increase spending this year by 9% to 25 trillion Won, with 15 trillion Won going to the chips division, 6.6 trillion Won to flat screens and the rest to boosting overseas production capacity and new research and development centres.

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