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Samsung estimates record second-quarter profits of $5.9 billion

post #1 of 42
Thread Starter 
Driven by sustained growth of its smartphone segment, Samsung has provided guidance for record profit of $5.9 billion from its June quarter.

The Korean electronics maker provided an initial estimate for its quarterly performance ahead of the complete results due later this month, Reuters reported on Thursday. The company tentatively reported revenue of 47 trillion won ($41.5 billion), slightly less than a forecast of 50 trillion won.

Samsung's estimated profit of 6.7 trillion won ($5.9 billion) tops its previous record of 5.85 trillion won, which came in the first quarter of this year. Wall Street consensus projections compiled by Reuters had averaged expectations of 6.67 trillion won in profits.

Galaxy smartphone sales have helped Samsung reach its new heights. Samsung's most-recent flagship phone, the Galaxy S III, launched in Europe in May, while overwhelming demand for the device led to delays in its U.S. launch. The company said last week it expects to sell 10 million Galaxy S III units in just two months of availability.

Galaxy


Rival Apple actually sought to block the U.S. launch of the Galaxy S III as part of its patent battle with Samsung, but it was unsuccessful in obtaining an injunction. The iPhone maker did, however, succeed in winning preliminary injunctions against the Galaxy Nexus smartphone and the Galaxy Tab 10.1 tablet.

Samsung and Apple have developed a neck-and-neck rivalry in the smartphone market as the two have traded positions as the world's largest smartphone maker from quarter to quarter. Recent estimates pegged Samsung as the leader during the March quarter.
post #2 of 42

The sad part is that Samsung won't be able to pay any of this to their R&D department. 

 

Because it's not actually part of the company. It isn't even in the same country. 

 

It's here:

 

1 Infinite Loop

Cupertino, CA

95014

USA

post #3 of 42

Samsung is firing on all cylinders.

post #4 of 42
Quote:
Originally Posted by Minnesota_Steve View Post

Samsung is firing on all cylinders.

And drafting the lead car.

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post #5 of 42
Quote:
Originally Posted by SolipsismX View Post


And drafting the lead car.

True.

post #6 of 42

That's a 14% profit margin, slightly less than half of Apple's ~30% (mrq).

 

They are certainly doing well at the low end, it would seem. Good for them! Someone needs to serve that market segment as well.

post #7 of 42
Quote:
Originally Posted by anantksundaram View Post

That's a 14% profit margin, slightly less than half of Apple's ~30% (mrq).

 

They are certainly doing well at the low end, it would seem. Good for them! Someone needs to serve that market segment as well.

 

I think their Galaxy S series is on the high end.  Their other businesses surely pull down the profits.

post #8 of 42
it's reports like these that always make me happy to remember something steve during a presentation. i can't remember the specifics (like when or where, exactly), but it was sometime around the beginning of 2010 i think. he said something along the lines of "we're a 50 billion dollar a year company" (referring to revenue). what he accomplished is as remarkable now as it was then.
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post #9 of 42
Quote:
Originally Posted by anantksundaram View Post

That's a 14% profit margin, slightly less than half of Apple's ~30% (mrq).

 

They are certainly doing well at the low end, it would seem. Good for them! Someone needs to serve that market segment as well.

Agreed...I remember when Nokia dominated the "Low end," too! :) 

post #10 of 42
Quote:
Originally Posted by SolipsismX View Post

And drafting the lead car.

I had to look that one up, but excellent analogy!
post #11 of 42
Quote:
Originally Posted by Quadra 610 View Post

The sad part is that Samsung won't be able to pay any of this to their R&D department. 

 

 

Facts being facts via public financials, you do realize Samsung spent 9 billion in R&D last year compared to about 2.5 billion by Apple, right? That doesn't include the 22.5 billion they are estimated to spend this year on fabrication and facilities upgrades.

 

By all means hate on Samsung to your little hearts content, but the snarky stupidity seems immature and devoid of any factual backing. 

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post #12 of 42
Quote:
Originally Posted by thataveragejoe View Post

That doesn't include the 22.5 billion they are estimated to spend this year on fabrication and facilities upgrades.

Define fabrication. 😷
Edited by SolipsismX - 7/5/12 at 9:11pm

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #13 of 42

Good points.  Many of the critical components in products Apple have been from Samsung.  Displays, memory, etc.   They are an awesome force in personal electronics.

post #14 of 42
Quote:
Originally Posted by Pooch View Post

it's reports like these that always make me happy to remember something steve during a presentation. i can't remember the specifics (like when or where, exactly), but it was sometime around the beginning of 2010 i think. he said something along the lines of "we're a 50 billion dollar a year company" (referring to revenue). what he accomplished is as remarkable now as it was then.

The quote is "If you annualize our quarterly revenue, it's surprising that Apple is now a $50+ billion company." (1)


An interesting note is:

"... The Company [Apple] posted record quarterly revenue of $46.33 billion and record quarterly net profit of $13.06 billion..." (2)

"... The Company posted quarterly revenue of $39.2 billion and quarterly net profit of $11.6 billion..." (3)

"... Peter Oppenheimer, Apple’s CFO stated that “Looking ahead to the third fiscal quarter, we expect revenue of about $34 billion." (3)


Apple announced almost $50 billion in revenue in one quarter of fiscal year 2012 and appear to be headed upwards of $150 billion for fiscal year 2012 with profits likely to reach $40 billion.



1. Prince McLean 25 January 2010. Steve Jobs: Apple a $50B company, excited over 'major new product'. Apple Insider. Retrieved 5 July 2012.
2. Unattributed. Published 24 January 2012. Apple Reports First Quarter Results. Apple. Retrieved 5 July 2012.
3. Unattributed. Published 24 March 2012. Apple Reports Second Quarter Results. Apple. Retrieved 5 July 2012.
post #15 of 42
Quote:
Originally Posted by Minnesota_Steve View Post

I think their Galaxy S series is on the high end.  Their other businesses surely pull down the profits.

Yeah, you think.

I could tell you "I think" the opposite is true, and you would have no way to counter it one way or another.

Just get used to the fact that Samsung caters to the low end. Nothing wrong with that. Someone has to do it.
post #16 of 42
Quote:
Originally Posted by MacBook Pro View Post


The quote is "If you annualize our quarterly revenue, it's surprising that Apple is now a $50+ billion company." (1)
[...] 1. Prince McLean 25 January 2010. Steve Jobs: Apple a $50B company, excited over 'major new product'. Apple Insider. Retrieved 5 July 2012.

 

thanks! (i would swear that i heard him verbalize it somewhere.) http://www.apple.com/pr/library/2010/01/25Apple-Reports-First-Quarter-Results.html
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post #17 of 42
Quote:
Originally Posted by anantksundaram View Post


Yeah, you think.
I could tell you "I think" the opposite is true, and you would have no way to counter it one way or another.
Just get used to the fact that Samsung caters to the low end. Nothing wrong with that. Someone has to do it.

 

But you would be wrong to think that. 

post #18 of 42
Quote:
Originally Posted by Pooch View Post

thanks! (i would swear that i heard him verbalize it somewhere.)http://www.apple.com/pr/library/2010/01/25Apple-Reports-First-Quarter-Results.html


If you were listening to the earnings call then no doubt you did hear him say that. As you can see from my post the statement by Steve Jobs was of sufficient interest to use as the lead for the story.

I was more interested in noting that Apple is now nearly a $50 billion per quarter company. Your post reminded me of that fact.

Quote:
Originally Posted by Minnesota_Steve View Post

But you would be wrong to think that. 


Should be easy to prove his statement incorrect. I'll wait ...
post #19 of 42
Quote:
Originally Posted by Minnesota_Steve View Post

 

But you would be wrong to think that. 

 

While S3 is high-end product, Samsung's production covers from cheapest feature phones, across entry level (cheap) Androids like Galaxy Mini and Ace... not to mention other electronics they are making. Without high end exclusivity, their image will never reach the one of Apple, even if their profits do.

 

I'm not holding that against Samsung, just saying. S3 is attractive to me (or not) regardless of Samsung's image.

post #20 of 42
Quote:
Originally Posted by thataveragejoe View Post

 

Facts being facts via public financials, you do realize Samsung spent 9 billion in R&D last year compared to about 2.5 billion by Apple, right? That doesn't include the 22.5 billion they are estimated to spend this year on fabrication and facilities upgrades.

 

By all means hate on Samsung to your little hearts content, but the snarky stupidity seems immature and devoid of any factual backing. 

 

Lots of people like to take Apple's R&D spending and try to spin it to look like they are somehow deficient. It's simply not true.

 

That $9 billion Samsung spends is divided up among hundreds of products from the actual components (DRAM, NAND, LCD panels, OLED panels, processors, lithium batteries, hard drives) to end user products (mobile phones, tablets, laptops, desktops, digital cameras, televisions, home theatre and on and on).

 

Apple's $2.5 billion is divided up between a small handful of products. In terms of R&D spending vs the number of products, Apple is far higher than Samsung.

 

Another metric people like to use is R&D as a percentage of revenue. This is one where Apple again appears to be behind since they spend such a small portion of their revenue on R&D. The other way to look at it is that Apple gets a far better return on their R&D investment than other companies do. Designing a small number of highly successful products is what makes Apple so profitable. In contrast to Samsung who decides to take the shotgun approach (28 models of smartphones and 90+ models of televisions) and therefore get a much lower rate of return for their R&D.

 

Hate on Apple all you want, but the facts speak for themselves. Apple is the most efficient, streamlined and profitable technology company in the world.

post #21 of 42
Quote:
Originally Posted by Pooch View Post

it's reports like these that always make me happy to remember something steve during a presentation. i can't remember the specifics (like when or where, exactly), but it was sometime around the beginning of 2010 i think. he said something along the lines of "we're a 50 billion dollar a year company" (referring to revenue). what he accomplished is as remarkable now as it was then.

 

Samsung's 2Q revenue is $41B..  At this rate, Samsung will be a 200 billion dollar a year company in a year or two.

post #22 of 42
Quote:
Originally Posted by Quadra 610 View Post

The sad part is that Samsung won't be able to pay any of this to their R&D department. 

 

Because it's not actually part of the company. It isn't even in the same country. 

 

It's here:

 

1 Infinite Loop

Cupertino, CA

95014

USA

 

Yes, that is absolutely true if you are talking about Apple's *Marketing R&D*.  As it happens, Samsung is expected to be #1 patents granted in a few years. 

 

Apple is a very successful marketing company, no doubt about that - it's just too bad that it's a mediocre, second rate technology company.


Edited by tooltalk - 7/5/12 at 10:17pm
post #23 of 42
Looks like Samsung will have plenty of cash on hand to fight the patent wars with Apple.
post #24 of 42
Quote:
Originally Posted by tooltalk View Post

 

Samsung's 2Q revenue is $41B..  At this rate, Samsung will be a 200 billion dollar a year company in a year or two.

 

i think you're missing the spirit and point of my post. it wasn't an attempt at a pissing contest; it was to point out something steve said a while back that, it seemed to me, even he was overjoyed with.

 

but hey, who am i to rain on your parade? with 46 billion in revenue in 1Q12 and 39 in 2Q12 apple will be a 200 billion dollar a year company in a year or two. too.

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post #25 of 42
Quote:
Originally Posted by tooltalk View Post

Yes, that is absolutely true if you are talking about Apple's *Marketing R&D*.  As it happens, Samsung is expected to be #1 patents granted in a few years. 

Apple is a very successful marketing company, no doubt about that - it's just too bad that it's a mediocre, second rate technology company.

Proper use of a reality distortion field takes practice. You clearly need a lot more.
post #26 of 42
Quote:
Originally Posted by EricTheHalfBee View Post

 

Lots of people like to take Apple's R&D spending and try to spin it to look like they are somehow deficient. It's simply not true.

 

That $9 billion Samsung spends is divided up among hundreds of products from the actual components (DRAM, NAND, LCD panels, OLED panels, processors, lithium batteries, hard drives) to end user products (mobile phones, tablets, laptops, desktops, digital cameras, televisions, home theatre and on and on).

 

Apple's $2.5 billion is divided up between a small handful of products. In terms of R&D spending vs the number of products, Apple is far higher than Samsung.

 

Another metric people like to use is R&D as a percentage of revenue. This is one where Apple again appears to be behind since they spend such a small portion of their revenue on R&D. The other way to look at it is that Apple gets a far better return on their R&D investment than other companies do. Designing a small number of highly successful products is what makes Apple so profitable. In contrast to Samsung who decides to take the shotgun approach (28 models of smartphones and 90+ models of televisions) and therefore get a much lower rate of return for their R&D.

 

Hate on Apple all you want, but the facts speak for themselves. Apple is the most efficient, streamlined and profitable technology company in the world.

 

 

 

hmm.. that's an interesting spin. Samsung Electronics is indeed a very diversified company, but look at R&D spending at other companies, not as diversified as Samsung:

 

 

Microsoft (MSFT): $9.4

• Intel (INTC): $8.4

• International Business Machines (IBM): $6.3

• Cisco Systems (CSCO): $5.6

• Google (GOOG): $5.2

• Oracle (ORCL): $4.4

 

Take for instance Oracle whose bread & butter comes from database, crm and really nothing else - its recent acquisition of Sun Microsystem notwithstanding. It still spends way more than Apple spends on R&D (almost double the amount Apple's R&D budget). The only difference between Apple vs. Oracle's model is that Oracle is more of a technology leader than a marketing machine. The complete opposite is true for Apple. 

 
Now, I have no problem with Apple's success or its R&D approach. Let's spend as little as possible on costly technical innovation; let others like Samsung, Toshiba, Sharp work out the hard problems and risk billions on manufacturing components with cut-throat ROI. After all, they need a marketing machine like Apple to actually sell their manufactured goods.  As a Apple shareholder (100 so far), it's a win-win strategy.
post #27 of 42

A little known fact about Samsung and its R&D employees is that Samsung pays below industry wages for engineers and works them like crazy. So the value they get from spending $9 billion on R&D is higher than what you would get from say, a Japanese electronics firm or American tech company.

 

When Apple was hiring chip engineers guess which company's employees were sending a flurry of resumes for these jobs? Samsung. 

post #28 of 42
Quote:
Originally Posted by SolipsismX View Post


And drafting the lead car.

 

In a stolen car, as well.


Edited by GTR - 7/8/12 at 8:19pm
Apple Products: So good that their ‘faulty' products outsell competitor’s faultless ones...
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Apple Products: So good that their ‘faulty' products outsell competitor’s faultless ones...
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post #29 of 42

I think everyone should be paying attention about how big Samsung is getting to be. They are the biggest Flash AND DRAM Maker in the world. They are largest Display Panel Maker in the world. The are getting into Fabs Business with their expertise in DRAM and Flash, as well as IBM Chip Alliance. It will only be a few more years before they take the crown from TSMC.

 

Although the good thing is history has shown no single player has manage to win on both front.   

post #30 of 42
Quote:
Originally Posted by eric475 View Post

A little known fact about Samsung and its R&D employees is that Samsung pays below industry wages for engineers and works them like crazy. So the value they get from spending $9 billion on R&D is higher than what you would get from say, a Japanese electronics firm or American tech company.

When Apple was hiring chip engineers guess which company's employees were sending a flurry of resumes for these jobs? Samsung. 

I'm certainly not a neurologist, but I am well read. Back in WWII, we supposedly took every Japanese person or persons of descendant an put the in internment camps.

Yea WE did that.

Now supposedly we learn from history... Always quandered about this.

Would Apple, who's "doubling down" on security. Want to hire some one who could "phone home" so to speak.

Maybe they do. I wouldn't. Just MHO! Very humble opinion.
post #31 of 42
Before someone beats me to it...

Yes, during opperation 'paperclip', we took every scientist from Germany we could. At the end of the war.

Just saying before someone says, everyone steals! Very far off from thread though. Sorry.
post #32 of 42
Quote:
Originally Posted by SolipsismX View Post


Define fabrication. 😷

Samsung will invest 2.25 trillion Korean won in the new fabrication line, which will break ground this month with a target timeline for 
completion by the end of 2013. The new fabrication line will mainly produce highly advanced mobile application processors on 
300mm wafers at 20nm and 14nm process nodes. 

 

http://www.samsung.com/us/news/newsRead.do?news_seq=20185&page=1&gltype=globalnews

 

There;s more in the complete article, but it seems to be a semiconductor chip fab facility.

post #33 of 42
Quote:
Originally Posted by tooltalk View Post

 

 

Apple is a very successful marketing company, no doubt about that - it's just too bad that it's a mediocre, second rate technology company.

 

 

I'm not at all convinced that is true.  They are a leader in tech.  

 

Their computer business can be described as "second rate" by sales metrics, but otherwise, they their computer business is quickly becoming a sideline for them.  

 

They make high quality products - they are not second rate WRT quality.  I'm not sure which metric you had in mind when you describe them as second rate.  

 

Their tablet business is first rate in sales.  Looking at individual  models, their smartphone business is first rate in sales.

 

they are way, way behind Android in the smartphone OS business, but the OS is  not an independent business, but rather, integrated into the physical products.

 

A lot can be said about Apple., but second-rate?  Only in some areas, and not overall.

post #34 of 42
Quote:
Originally Posted by tooltalk View Post

 

Yes, that is absolutely true if you are talking about Apple's *Marketing R&D*.  As it happens, Samsung is expected to be #1 patents granted in a few years. 

 

Apple is a very successful marketing company, no doubt about that - it's just too bad that it's a mediocre, second rate technology company.

 

You can remove every shred of marketing that Apple has ever applied to their tech, and it will *still* delight and amaze. Because no one comes close to Apple's DIFFERENTIATION. Apple's entire business is based on insane levels of product differentiation. They will ALWAYS stand out as something special. No one else does (or has ever really done, for years) a vertical business model.

 

On the other hand, you can apply every shred of marketing savvy possible to, say, Windows Phone - invest hundreds of millions of dollars, do very public "smoked by" whatever campaigns, get a big mobile name to do the hardware, throw money at developers, hell - even give the damn things away for fee, and do this for nearly two years, and STILL barely move past your initial position, if at all. 

post #35 of 42
Quote:
Originally Posted by Quadra 610 View Post

 

You can remove every shred of marketing that Apple has ever applied to their tech, and it will *still* delight and amaze. Because no one comes close to Apple's DIFFERENTIATION. Apple's entire business is based on insane levels of product differentiation. They will ALWAYS stand out as something special. No one else does (or has ever really done, for years) a vertical business model.

 

On the other hand, you can apply every shred of marketing savvy possible to, say, Windows Phone - invest hundreds of millions of dollars, do very public "smoked by" whatever campaigns, get a big mobile name to do the hardware, throw money at developers, hell - even give the damn things away for fee, and do this for nearly two years, and STILL barely move past your initial position, if at all. 

 

The act of differentiating one's self makes them successful? What if what the company differentiates out into is something consumers do not like?

 

As for Apple being the leader in tech, ehh, it comes down to what you look at. Their products are fantastic but only because they search out the best components. Barring maybe only the A4, A5, and A5X, Apple focuses more on product design. They do not do the technical stuff.


Edited by Samson Corwell - 7/6/12 at 8:50am
post #36 of 42
Quote:
Originally Posted by Samson Corwell View Post

 

The act of differentiating one's self makes them successful? What if what the company differentiates out into is something consumers do not like?

 

Apple's entire business model, and their philosophy when it comes to tech, is built to prevent this. In effect, Apple's starting position already stacks the deck in their favour, whereas the competition - by the very business model they employ - makes the task of delighting consumers and capturing their sustained interest an uphill battle. 

 

This is why, all else being equal, the standard bet right out of the gate is on the Apple product. Apple's track record for the past decade speaks for itself. 

post #37 of 42
Quote:
Originally Posted by Quadra 610 View Post

 

You can remove every shred of marketing that Apple has ever applied to their tech, and it will *still* delight and amaze. Because no one comes close to Apple's DIFFERENTIATION. Apple's entire business is based on insane levels of product differentiation. They will ALWAYS stand out as something special. No one else does (or has ever really done, for years) a vertical business model.

 

On the other hand, you can apply every shred of marketing savvy possible to, say, Windows Phone - invest hundreds of millions of dollars, do very public "smoked by" whatever campaigns, get a big mobile name to do the hardware, throw money at developers, hell - even give the damn things away for fee, and do this for nearly two years, and STILL barely move past your initial position, if at all. 

you are sooo right!!  The only products that Samsung has been popular with are the ones that when you see one on at a glance you think its an Apple product. 

post #38 of 42
Quote:
Originally Posted by Samson Corwell View Post

 

The act of differentiating one's self makes them successful? 

 

Not on its own, but without that it's much more difficult. 

post #39 of 42
Quote:
Originally Posted by Samson Corwell View Post

The act of differentiating one's self makes them successful? What if what the company differentiates out into is something consumers do not like?

As for Apple being the leader in tech, ehh, it comes down to what you look at. Their products are fantastic but only because they search out the best components. Barring maybe only the A4, A5, and A5X, Apple focuses more on product design. They do not do the technical stuff.

Apple does not do the technical stuff, for example:

Gesture recognition for multi-touch keyboards
Highly efficient semiconductor logic design for enabling high performance microprocessors with fewer transistors and low power consumption
Conversational user interface using natural language processing with semantic understanding and context awareness
Facial recognition for auto-tagging for users
Sophisticated signal processing algorithms for three-dimensional photorealistic geospatial rendering
Memory Signal Processing technology solutions designed to improve the speed, endurance and performance of flash storage systems while reducing cost
Edited by MacBook Pro - 7/6/12 at 6:16pm
post #40 of 42
Quote:
Originally Posted by Quadra 610 View Post

 

Apple's entire business model, and their philosophy when it comes to tech, is built to prevent this. In effect, Apple's starting position already stacks the deck in their favour, whereas the competition - by the very business model they employ - makes the task of delighting consumers and capturing their sustained interest an uphill battle. 

 

This is why, all else being equal, the standard bet right out of the gate is on the Apple product. Apple's track record for the past decade speaks for itself. 

Could you please elaborate on what Apple does to "stack the deck in their favour".

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