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Samsung plays mailman, delivers nearly 52 million phones in Q3: Oppenheimer: Samsung market share grows to 16.7%

Samsung Electronics Co. Ltd. beat expectations on handset shipments in the third quarter, and gained market share partly through aggressive pricing. Handsets drove the Korean conglomerate’s revenue in the quarter as the company’s semiconductor business lagged.
The results appeared to reflect Samsung’s push into emerging markets, aggressive handset pricing – possibly the factor cited earlier this year by Nokia Corp., which characterized the move as “unsustainable” – and massive marketing efforts.
Samsung’s overall revenue reached $13.4 billion, up 15% over the year-ago quarter, while overall net income reached $850 million, down 44% over the year-ago quarter.
Though Samsung’s telecom business – led by handsets – was tops in sales, that division’s operating profit was down 15% year-on-year and down 36% quarter-on-quarter. Handset revenue reached $4.3 billion, up 27% over the year-ago quarter.
Handset unit shipments reached 51.8 million, up 22% year-on-year and 13% sequentially, exceeding 50 million in a quarter for the first time – Samsung’s stated goal for the quarter. The quarter-on-quarter growth exceeded the market’s overall growth.
Samsung’s success came at the high-end and low-end of the market, according to the company, which cited its smartphones and touchscreen devices, as well as entry-level handsets in emerging markets. Average selling prices dropped to $143 from $135. The company’s operating margin in handsets and network products dropped to 9.5% from the prior quarter’s 11.3%. The company said that was due to increased marketing expenses.
The company gained market share to reach about 16.7%, up from 15% the prior quarter, according to analyst Ittai Kidron at Oppenheimer.
Going forward, Samsung forecast 10% sequential growth in holiday quarter, though less than historical seasonal growth – roughly in line with other vendors’ expectations.
The company cited “intense competition” in the high-end handset market, but reaffirmed its goal over shipping more than 200 million units by year’s end.
Industry scuttlebutt has it that the vendor still has several handsets to launch in the United States market this quarter.

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