Samsung has reported a record quarterly profit of $8.3B, thanks to strong sales from its mobile division which has seen its business nearly double year over year. That $8.3B reflects an increase in profit of 89%, which is a huge percentage number for an already very sizable company like Samsung.
Analysts expected Samsung to cut capital spending (manufacturing/production equipment, etc…) because Apple has announced that it would gradually diversify its chip manufacturing and memory procurement from Samsung to other vendors. Against the grain, Samsung is keeping the current level of spending, in a show of confidence that the company can make up for the loss of the Apple chip business – most likely with its own Smartphone and mobile products.Apple is considered as the largest Flash memory buyer, and a very substantial buyer of semiconductor manufacturing. Samsung handled the lion share of both, until the interest if both companies collided in a series of high-profile lawsuits. Samsung has reportedly fired back by increasing its pricing to Apple.
Samsung plans to announce the Samsung Galaxy S4 in the coming months, and expects to sell as much as 10M units per month following its release. Apple is still doing very well and remains a strong player, but yesterday, its stock took a beating as iPhone sales failed to impress investors and Mac sales tanked by 21%. Sellers are worried about growth and about the meteoric rise of Samsung.