Mobile

Samsung’s profits rocket 76 percent, but growth is slowing

Samsung, in case you didn’t know, is really good at selling smartphones.

Over 60 percent of its record $52.6 billion Q4 2012 revenue came from sales of phones like the Galaxy S III and Galaxy Note 2. Net profit rose 76 percent in the quarter to $6.6 billion.

Samsung’s overall revenue was also given a bump thanks to good numbers from its chips and television businesses.

But even among all those big numbers there are signs that that growth is starting to flatten out. Year-on-year revenue growth for the mobile division dropped from 82 percent in the third quarter to 58 percent, as The Wall Street Journal points out. Samsung is essentially running out of people to sell its phones to.

To reverse this slowdown, the company will likely refocus its efforts on mid- and low-end phones, which more people can afford. The problem here is that margins on cheaper phones are lower than those on more expensive devices. So while Samsung may end up selling more phones, it’ll make less money on them. (If that sounds familiar, it’s likely because Apple’s in a very similar situation.)

In the meantime, however, Samsung’s Android gambit continues to pay off.


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