Samsung says sales of Galaxy S3 will top 10m

SAMSUNG ELECTRONICS expects sales of its new Galaxy S III, launched at the end of last month as a main rival to Apple’s iPhone, to top 10 million during July, making it the South Korean group’s fastest-selling smartphone.

It also predicted earnings from its handset division would be higher in the current second quarter than in January-March, countering market concerns that tight supplies of the new Galaxy model and the weak global economy would pressure earnings at Asia’s most valuable technology firm.

Shares in Samsung dropped more than 4 per cent yesterday to a 4½-month low, after more brokers cut their quarterly profit outlook, citing concerns over its chip and telecoms businesses. The benchmark Kospi stock index was down 1.6 per cent.

“The overall market condition was challenging due to euro zone issues and tight supply of components . . . but [our] second-quarter results will be better than the first quarter,” JK Shin, head of Samsung’s mobile division, told reporters.

Profit from Samsung’s mobile division nearly trebled in January-March to $3.6 billion, accounting for 73 per cent of group operating profit.

Samsung kicked off global sales of its Galaxy S III on May 29th, but shipments have been affected by the tight supply of parts such as the handset casing for the pebble-blue model.

“Supply remains very tight due to strong demand and component shortages, but we expect overall supply conditions to improve from next week,” Mr Shin said.

Samsung said in late April that new Galaxy smartphones would “substantially contribute” to second-quarter results.

Analysts have downgraded estimates for Samsung’s second-quarter smartphone shipments in recent weeks, predicting sales of the latest Galaxy model have triggered a steeper than expected drop-off in sales of earlier products. They also cited tight supply of the S III model and growing competition from low-end manufacturers such as Huawei Technologies and ZTE.

JPMorgan cut its forecast for Samsung’s second-quarter smartphone shipments by a tenth to 50 million units. – (Reuters)