Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Attendees wear 3D glasses to watch the movie "Megamind" at the Samsung 3D arena at the 2011 International Consumer Electronics Show January 6, 2011 in Las Vegas, Nevada. (ROBYN BECK/AFP/Getty Images)
Attendees wear 3D glasses to watch the movie "Megamind" at the Samsung 3D arena at the 2011 International Consumer Electronics Show January 6, 2011 in Las Vegas, Nevada. (ROBYN BECK/AFP/Getty Images)

Samsung fights for connected TV Add to ...

Samsung Electronics is banking on surging smartphone sales and a recovery in its memory chip business to help it rebound from a fourth-quarter profit dip, while slugging it out with global rivals to sell a new generation of TVs.

The world's biggest maker of flat screens and memory chips, which on Thursday estimated fourth quarter profit to come in below market expectations, is pinning its hopes on cut-rate prices stabilizing in the chips and panel sectors.

Analysts expect Samsung's weakest profit estimate in six quarters to remain a short-term blip and improve in the next few quarters.

After a slow start, Samsung is emerging as a credible challenger to Apple with its Galaxy S high-end smartphone, powered by Google's Android software. Samsung's Galaxy Tab is also seen by some analysts as the strongest rival to Apple's blockbuster iPad tablet.

"Samsung has successfully expanded into the smartphone and tablet PC segments," said Ahn Young-hoe, a fund manager at KTB Asset Management.

"Samsung is a totally different story compared to pure chip and display plays. Its diversified portfolio creates stable profits in the cyclical businesses."

At the Consumer Electronics Show in Las Vegas, Samsung also signalled an aggressive push into "smart" and 3D TVs this year as it aims for a 15 per cent jump in TV sales in 2011.

Samsung, the first major global technology firm to flag preliminary quarterly results, said its expects its operating profit to come in at 3.0 trillion won ($2.67-billion) for October-December, lower than a consensus forecast of 3.4 trillion won, the figure it reported for the same period in 2009.

"...Only Samsung can rival Apple in tablets and smartphones," said Kim Young-Chan, analyst at Shinhan Investment Corp. "We think these segments will continue to grow. Earnings at Samsung hit the bottom in the fourth quarter."

Shares in the company, which has a tradition of beating even the most bullish estimates, fell 1 per cent to underperform the Seoul market .

Samsung has become a top global brand in the space of 10 years and now boasts a market value of $136-billion, equal to the combined value of Sony Corp, Nokia , Toshiba Corp and Panasonic Corp .

Its shares have jumped 25 per cent since November and hit a record high on Monday on expectations of a recovery in profits. Out of 46 analysts tracking Samsung, 44 have a buy or strong buy.

Samsung has held on to its No.1 slot in TVs against Sony and Panasonic and is performing strongly over U.S. chip rival Micron Technology . The firm aims to double its smartphone shipments in 2011 to more than 50 million units.

BIG PRESENCE AT LAS VEGAS

It booked the biggest space among participants this year at the Consumer Electronics Show to display a plethora of products from smartphones to tablets and TVs.

Shaken by their failure to inspire consumers in a recession with fancy TVs, major producers from Samsung, LG Electronics to Sony all talked up Internet connectivity on the small screen at the show, hoping to grab a bigger slice of an emerging market where no single player dominates.

The fight over enabling viewers to hook up TVs to Web shows and software stored in the cloud and on personal computers is not short of aspirants, with technology heavyweights from Google and Microsoft to Apple all wrestling to make their technology the standard.

Samsung aims to quadruple sales of 3D TV sets to around 8-9 million units this year, while aggressively promoting Internet-enabled TVs. Sony, Panasonic and Sharp are also beefing up their connected TV offerings.

DisplaySearch estimates 21 per cent of all TVs shipped in 2010 have Internet connectivity, and the segment is expected to grow at double-digit rates over the next four years, swelling to 122 million units by 2014.

Global tablet sales are expected to surge to 54.8 million units in 2011, from 19.5 million last year, according to research firm Gartner.

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular