Samsung to concentrate on profit rather than handset volume

Samsung to concentrate on profit rather than handset volume
At the CES in Las Vegas, Samsung CEO Choi Gee-sung told Reuters that increasing profitability is the Korean manufacturer's new number one target. Just the day before, the executive said that Samsung plans on becoming the world's number one handset maker this year to break Nokia's 14 year reign on top. Gee-sung said that Samsung has topped Nokia in terms of revenue, will probably top the Finnish based firm in terms of volume shipped this year, but trails other companies when it comes to profits. "Our target should move on to this," Choi said.

In the third quarter of last year, Samsung became the top smartphone manufacturer and is building on the success of its well-received Samsung Galaxy S II. The company announced at CES that the 5.3 inch Samsung GALAXY Note "phablet" will be coming Stateside to AT&T 4G LTE enabled and smartphone fans are waiting impatiently to see what the specs will be on the Samsung Galaxy S III.

If Samsung is going after profits, they will be chasing Apple which is the most profitable smartphone maker. The Cupertino based firm has a profit margin of 40% which means that of every $1 in sales, it makes 40 cents in profits. Samsung has a profit margin of 17%, which is obviously going to have to rise if it is to challenge those firms ahead of it when it comes to profitability. Gee-sung didn't give away any plans on how Samsung will accomplish this, but it will require the company to either concentrate on cutting corners by squeezing vendors, or by raising prices.

source: Reuters


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