Samsung nearly doubles lead over Apple in US smartphone market

Samsung Electronics` share of the U.S. smartphone market is almost double that of Apple, and the Korean company seems to have no competitor there.

Thanks to brisk sales of smartphones, Samsung earned a record operating profit of 6.72 trillion won (5.89 billion U.S. dollars) in the second quarter this year.

According to earnings announced by Samsung Friday and Apple Tuesday and a report by U.S. market research agency Strategy Analytics, Samsung sold 50.5 million units of smartphones worldwide in the second quarter and Apple 26 million units, further widening the gap.

In market share, Samsung`s was nearly double that of Apple at 34.6 percent to 17.8 percent. The gap had been just about 7 percentage points in the first quarter this year.

Smartphone sales in the second quarter reached 24.04 trillion won (21.09 billion U.S. dollars), up 60 percent year-on-year, with operating profit coming in at 4.19 trillion won (3.68 billion U.S. dollars), up 145 percent from the same period last year, pushing up the average earnings for Samsung.

On the contrary, Apple announced Tuesday that its sales and net profit increased about 20 percent each. These lower-than-expected results disappointed the market, and some said the iPhone is now experiencing a slump.

Market experts say Samsung smartphones will likely to continue selling the most through this year until the iPhone 5 is launched. Samsung announced that it will “focus on selling more Galaxy S3s in the third quarter this year and maintain its market share by producing various smartphone models targeting newly emerging markets.”

Apple plans to turn the situation to its advantage this fall by releasing a new iPhone model. Apple CEO Tim Cook said the next phone would create the “fall transition."

Oh the other hand, Samsung’s Friday announcement was close to an “earnings surprise.”

Aside from smartphones, the operating profit of Samsung`s home appliances recorded 760 billion won (667 million U.S. dollars), up 66 percent. Display panels like LCDs and OLEDs, which suffered a deficit in the same period last year, returned to the black as operating profit hit 750 billion won (658 million U.S. dollars).

The operating profit of semiconductors shrank 38 percent from the same period last year to 1.10 trillion won (960 million U.S. dollars) due to decline in product prices. Samsung’s share price closed at 1.23 million won (1,081.58 U.S. dollars) Friday, up 5.4 percent from Thursday.

Samsung said, “Exchange rate fluctuations including a weaker euro in the second quarter reduced operating profit about 79 billion won (69 million U.S. dollars), but we earned our largest ever operating profit thanks to our strong technology competitiveness,” adding, “We will strengthen the competitiveness of our main businesses by investing 11 trillion won (9.65 billion U.S. dollars) into facilities and further differentiate our products.”

nex@donga.com