Samsung Electronics has announced record profits on the same day that market data revealed it had taken an all-time record share of the overall phone market.
The group announced revenues of R345.3 billion (47.6 trillion won) on a consolidated basis for the second quarter ended June 30, 2012, a 21% increase year-on-year.
At the same time, Startegy Analytics announced new market data that showed Samsung had sold 50.5 million smartphones in the quarter, and a total of 90 million phones – giving it an all-time record 26% share of the global phone market.
“Global mobile phone shipments grew just 1 percent annually to reach 362.0 million units in Q2 2012,”” said Alex Spektor, Associate Director at Strategy Analytics. “”Fuelled by surging demand for its popular Galaxy models, Samsung was the star performer, shipping 93.0 million mobile phones worldwide and capturing a record 26% marketshare to solidify its first-place.””
Strategy Analytics reported that Nokia’s global handset shipments continued to decline, albeit at a more moderate minus 5% annual rate, reaching 83.7 million units in Q2 2012.
Apple shipped 26 million iPhones worldwide in Q2 2012.
For the quarter, Samsung’s consolidated operating profit reached a record R48.7 billion (6.72 trillion won), representing a 79% increase year-on-year. Consolidated net profit for the April-June period was R37.6 billion (5.19 trillion won).
In its earnings guidance disclosed on July 6, Samsung estimated second quarter consolidated revenues would reach approximately R340.9 billion (47 trillion won) with consolidated operating profit of approximately R48.6billion (6.7 trillion won).
Samsung posted solid sales and maintained its profit streak in the second quarter across all business segments, excluding semiconductors, amid lingering global business uncertainties. Digital Media & Communications comprising the Consumer Electronics and IT & Mobile Communications business sectors accounted for R265.3 billion (36.57 trillion won) in sales, up 37% year-on-year.
For Device Solutions, the results were mixed. While operating profit for the Display Panel segment registered an on-year increase, the Semiconductor Business saw profits drop by 38% compared with the same period last year, despite outperforming the previous quarter.
By business unit, the Mobile Communications Business was one of the leading growth drivers in the June quarter with R148.8 billion (20.52 trillion won) in revenue. With the successful launch of this year’s flagship GALAXY S III smartphone and robust GALAXY Note sales, the handset unit saw earnings jump by 75%from a year earlier.
The Visual Display Business also contributed to earnings gains with its diverse portfolio of TV models for both developed and emerging markets with R62.24 billion (8.58 trillion won) in revenue for the quarter.
‚””Despite a difficult business environment, we achieved stable profits in the second quarter through our differentiated products and competitive technology,‚”” said Robert Yi, Senior Vice President and Head of Investor Relations. ‚””As we move into the second half, continued fiscal instability in Europe and its effect on the global economy will result in the possibility of a slower-than-expected recovery and intensified market competition.‚””
Mr. Yi added that despite the economic uncertainties, ‚””Samsung will enhance the competitiveness of our main businesses and reinforce our value-added, differentiated products as a means to improve earnings.‚””
Overall, the third quarter is expected to be marginally positive as demand for consumer electronics goods, including smartphones and tablets, remains strong and a stream of new products hit the market. Supply for display panels is also expected to increase, as TV makers prepare for the year-end holiday season.
Capex R101.5 billion (14 Trillion Won) in First Half
Capital expenditure in the first six months was R101.5 billion (14 trillion won), with R70.4 billion (9.7 trillion won) invested in the Semiconductor Business and R18.8 billion (2.6 trillion won) in the Display Panel segment. The total capex for the first half accounted for 56% of the annual capex budget of R181.3 billion (25 trillion won) planned for 2012. Capex for the first quarter was R56.5 billion (7.8 trillion won).
Mobile AP Chips Sustain Growth
Samsung’s Semiconductor segment including the Memory and System LSI businesses posted an operating profit of R8.05 billion (1.11 trillion won) on revenue of R62.3 billion (8.6 trillion won) for the quarter, which equates to a 6% year-on-year decline in sales.
Weak global demand for PC DRAM chips still weighed on Samsung’s push for a recovery, although it responded to increased orders for server and mobile DRAM and hastened migration to the 30-nanometer and below process.
The NAND market picked up on higher OEM-related demand, improving quarter-on-quarter sales, particularly in solution products such as Solid State Drives (SSDs) for notebook PCs and Embedded Multimedia Cards (eMMC), but a steepening price decline hampered stable growth.
The System LSI Business, which creates application processors (AP) and image sensors for smartphones, is forecasted to maintain profitability in the third quarter as demand for faster and higher-capacity chips used in mobile devices increases.
Samsung will also look to gain a leading edge in the mobile AP business, following the recent announcement of our acquisition of CSR’s mobile business and NanoRadio, which we expect to reinforce our already differentiated mobile AP technology.
In the third quarter, we anticipate a weaker-than-expected recovery in demand for PC DRAM due to lackluster back-to-school orders and intensifying competition.
In contrast, we expect market conditions for NAND to improve in the lead-up to the National Day and Black Friday holidays in China and the U.S., respectively. Samsung will continue to concentrate on value-added products such as server and mobile DRAM.
Display Panel Continues Improvement
The Display Panel segment recorded an operating profit of R5.4 billion (750 billion won) on revenue of R59.8 billion (8.25 trillion won). This amounted to a R3.4 billion (470 billion won) increase in profit from the previous quarter and a 16% increase in sales compared to the same period last year.
Despite weaker than expected panel demand due to the economic slowdown in Europe and low seasonality, Samsung’s total TV panel shipments increased in the low 10% range on-year due to strong sales of high, value-added products such as panels for 3D TVs and LED TVs.
Looking ahead, demand for TV panels is expected to grow in the next quarter as TV makers prepare for the end-of-year high-demand season and the Chinese National Day holidays. The effect of an energy saving subsidy in China is also expected to stimulate demand for LED TV products.
For the IT panel sector, the continuation of weak demand for panels used in notebook PCs and monitors was offset by strong demand for tablet PC panels. Launches of new smartphone products also contributed to continued profitability in OLED panels.
In the third quarter, economic uncertainty in developed markets and the sluggish market demand for notebook PCs and monitors is expected to dampen overall demand. The expansion and diversification of the tablet PC market, however, is forecast to fuel an increase in demand for tablet PC panels and Samsung will aim to expand sales of LCD and OLED panels for smartphones.
Sales of Smart Devices Lead Gains
The IT & Mobile Communications division, comprising Mobile Communications, Telecommunication Systems, IT Solutions and Digital Imaging, registered quarterly operating profits of R30.3 billion (4.19 trillion won) for the second quarter. Revenue reached, R174.3 billion (24.04 trillion won) and the mobile unit accounted for R148.8billion (20.52 trillion won), a 75% increase year-on-year.
The highly anticipated launch of GALAXY S III and upbeat sales of GALAXY Note, along with a more competitive average selling price (ASP) than the previous quarter, have cushioned an on-quarter operating loss brought on by the seasonably weak earnings of businesses in IT Solutions and Telecommunication Systems.
Handset shipments gained quarter-on-quarter and year-on-year, driven mainly by global orders for premium smartphones.
A sales decline in Long Term Evolution (LTE) wireless broadband technology equipment and slow demand for PCs and printers in the quarter will turn around in the July-September quarter with the expansion of LTE networks in developed countries and modest revenue growth in IT products.
The smartphone market, in particular, will continue to be profitable as consumers are given a wider choice of new products at a wider range of prices while orders from emerging markets increase.
In the third quarter, Samsung expects to further strengthen its leadership in the high-end smartphone market with the sales of GALAXY S III and also in the LTE equipment business with new devices.
TV Demand Boosts Profitability
The Consumer Electronics Division encompassing the Visual Display and Digital Appliances businesses posted revenue of R88.14 billion (12.15 trillion won) for the second quarter, a 7%increase year-on-year. The operating profit of R5.51 billion (760 billion won) represented an increase of 66 percent compared with the same period last year.
Although demand for TVs remained flat year-on-year, Samsung posted improvements in both shipments and profitability. Increased sales in developed markets for the company’s premium TVs, such as the flagship ES7000 and ES8000 models, and expansion of region-specific LED TV models in emerging markets spurred a significant lift in earnings compared with the same quarter of last year.
This increase in demand saw Samsung increase its portion of LED TV sales from the mid 60% range to a mid 80% share, quarter-on-quarter.
Heading into the third quarter, although growth in developed markets may stall, Samsung aims to expand its presence in emerging markets with region-specific products and entry-level LED TVs. The company will also look to continue its leadership in Smart TVs in developed markets with continued cooperation with media and content providers.
As for Digital Appliances, sales of air conditioners rose on the back of strong seasonal demand and favorable market conditions in emerging markets. Moving into the third quarter, Samsung will focus on expanding sales of premium products and stabilising overseas operations in the face of a possible slowdown in emerging markets and weak consumer sentiment in developed markets.
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Triggerfish launches free digital learning Academy online
Platform designed for anyone wanting to understand more about career opportunities in animation.
Triggerfish, in partnership with Goethe-Institut and the German Federal Ministry of Economic Cooperation and Development, has launched Triggerfish Academy, a free digital learning platform for anyone wanting to understand more about the career opportunities and how to get started in the field of animation.
The website features 25 free video tutorials, quizzes and animation exercises introducing animation as a career and the principles of storytelling, storyboarding and animation, as well as several additional resources to help guide aspiring animators into a career in animation.
“The South African animation industry is growing – and so is the demand for skilled animators globally,” said Noemie Njangiru, head of Culture and Development at Goethe-Institut Johannesburg, pointing to the success of recent Triggerfish projects like the Oscar-nominated Revolting Rhymes; Mama K’s Team 4, recently announced by Netflix as their first original animated series from Africa; and this year’s New York Children’s Festival and Shanghai International Film and TV Festival winner Zog.
Njangiru also highlighted the opportunities for animation outside the traditional film industry, within fields like advertising, app and web design, architecture, engineering, gaming, industrial design, medicine, and the motor industry, not to mention growth sectors like augmented reality and virtual reality.
The course was created by Tim Argall, currently the animation director on Triggerfish’s third feature film, Seal Team. He’s roped in many of the South African animation industry’s brightest stars, from Malcolm Wope, character designer on Mama K’s Team 4, and Annike Pienaar, now working at Illumination in Paris on Sing 2, to Daniel Snaddon, co-director of the multi-award-winning BBC adaptations Stick Man and Zog, and Faghrie Coenraad, lead dressing and finaling artist on the Oscar-nominated Revolting Rhymes, as well as Triggerfish head of production Mike Buckland. The featured talent share not just their skills but also their stories, from how they broke the news they wanted to be animators to their parents, to common myths about the animation industry.
“As kids, animation is part of our lives, so we don’t really think about the idea that animation is actually somebody’s job,” said Argall. “When I was a kid, I loved animation and I loved to draw. I remember when I was about 12, I thought: ‘I really want to see my drawings come to life. I want to be an animator.’ But I had no idea where to even begin.”
Triggerfish Academy is his attempt to make it easier for the next generation of African animators: an accessible starter kit for anyone considering a career in animation.
“By the end of working through this course, you’ll have all the background you need to know whether animation is a good choice for your career,” said Njangiru.
Aspiring animators can also use Triggerfish Academyto learn how to write and animate their own short story, then post their animation on the Academy’s Facebook group for feedback and advice from professional animators.
Triggerfish Academy is set up so that youth can play with it directly, but it’s also been designed to double as an activity plan for teachers, NGOs and after school programmes to use. Schools, organisations and other animation studios who are interested in using it can contact Triggerfish for additional free classroom resources.
Triggerfish Academy is just one of a number of Triggerfish initiatives to train and diversify the next generation of African animators, like sponsoring bursaries to The Animation School; the Mama K’s Team 4 Writers Lab with Netflix; the pan-African Triggerfish Story Lab, supported by The Walt Disney Company and the Department of Trade and Industry; Animate Africa webinars; Draw For Life; and the Triggerfish Foundation schools outreach programme. For more information, visit www.triggerfish.com/academy.
Dell aims to unlock tech for start-ups
The upcoming Dell Technologies Forum in Johannesburg will show that cost and scale are no longer barriers for a mid-size businesses to adopt enterprise-grade tech
Today’s medium-sized companies enjoy reinvigorated access to business technology. The powerful systems that raised the game of enterprises are now also open to smaller, agile, start-up and niche businesses.
“When you look at medium and start-up businesses, those companies have very similar needs to a large company, but not necessarily the internal resources to always pull it off,” said Sabine Dedering, Regional Sales Director at Dell Technologies South Africa. “Dell Technologies worldwide has a lot of focus on the medium business. This includes South Africa, where we established a dedicated medium business team about a year ago.”
Medium-sized businesses – internationally defined as those typically between 100 and 1,000 IT users – do not necessarily have smaller IT footprints than their enterprise peers. Some manage large and complicated accounts or service enormous user-bases among their customers. In the big picture, they deal with the same complex market demands that the large players do, but until recently often had to make do with much less in access to technology due to constrained resources such as limited IT teams and budgets.
This balance shifted dramatically with the advent of cloud, scalable services and hyper-converged infrastructure. Yet despite the doors opening, the traditional gatekeepers – other vendors and their partners – still habitually focus on enterprise players. It undermines the new possibilities technology can offer to medium businesses, a world that often marchesto the beat of its own drums.
“These are not small customers,” said Dedering. “Sometimes they are market leaders in a specific niche. But they don’t have thousands of people. You get your traditional companies that may have a few hundred employees. They provide a certain service on a regional basis or in a niche market and might never grow much beyond that because that’s what they do really well.”
Everyday everyone faces the same thing: Challenges. With support from Dell Technologies, those Medium business and start-up customers can prevent work disruptions, streamline operations, and increase productivity, using scalable, fast technology optimised for the way their business works.
Ambitions to use modern enterprise-grade technologies can be purely functional, such as hunting for efficiencies and streamlining processes. But they can also include the adoption of emerging technologies such as machine learning, mobile workforces, predictive analytics, real-time data, Internet of Things (IoT), automation and active business continuity. These capabilities are available because their services are able to fit the mould of the business, instead of traditional monolithic technology systems that dictate cost and availability.
Accessing tech’s best
But just because the technology is more accessible doesn’t make its adoption seamless. That still requires a business-first view and as such a reliable partner. As mentioned earlier, too many vendor ecosystems obsess over large enterprises. But Dell Technologies has seen the demand from medium businesses and is actively meeting them on their terms.
This can be put to the test: there will be a stand dedicated to medium businesses at the upcoming Dell Technologies Forum in Johannesburg. Visitors will be able to meet Sabine Dedering and her team:
“First and foremost, we will have a chat and understand their business requirements. Then we will connect them with the experts at the Forum and showcase the different technologies available that could be relevant to them. For us, the main focus will be to understand our medium business customers, understand their business and how our expertise can help transform their business. We explore what types of services we can wrap around their requirements to make it easier for them to leverage technology the way other bigger companies may be.”
Finance is part of this conversation: Dell Technologies is pioneering a number of finance models that are very flexible and customised around customers’ cash flow.
Medium-sized businesses don’t need different technologies than what enterprises use. Nor are they excluded anymore: the barriers of costs, complexity and scale have collapsedto open the market, aligning to the limited resources that medium-sized companies have to manage. Every business has its own unique requirements.
* Dedering and her team will be at the Medium Business stand, hosted at the Dell Technologies Forum on 27 June, at the Sandton Convention Centre. Attendance is free but attendees must register beforehand at https://www.delltechnologies.com/en-za/events/forum2019/Johannesburg/index.htm.