in Mobile Gaming

#Samsung: Smartphone sales skyrocket

Samsung reported record quarterly profit of $7.4 bn on Friday, with strong sales of its Galaxy range of smartphones masking sharply lower memory chip sales. The South Korean firm said July-September operating profit almost doubled from a year ago to 8.12 trillion won, in line with its earlier estimate.

Samsung, reporting its results just hours after main rival Apple Inc, did not detail its third-quarter smartphone shipments, though these are estimated to have soared to 58 million. Apple said it shipped 26.9 million iPhones in July-September It launched its latest iPhone 5 on Sept. 21. Profits from Samsung’s mobile division more than doubled to 5.63 trillion won – more than two-thirds of the group’s total – as sales of the Galaxy S III, introduced in late May, powered ahead of the iPhone 5 launch. Samsung is estimated to have shipped 18-20 million S IIIs in July-September.

Earnings from the chip division, where Samsung competes against Toshiba Corp and SK Hynix Inc, dropped 28 percent to 1.15 trillion won as prices of dynamic random access memory (DRAM) chips sagged, though a recovery in NAND flash chips, widely used in mobile devices, helped offset the weakness. The company said it expected DRAM oversupply to run on into the current quarter, but sees a tight NAND flash memory market.

Smartphones continue to enjoy strong growth, be it Android or Apple. Companies that stand to profit from this development, no matter whether Samsung or Apple will win that race, are app developers. People want content for their new smartphones and highest up on the list are games. We have liked G5 Entertainment for quite some time (since mid 2010 to be exact) and continue to do so. As a 100% pure play on the mobile gaming growth it remains our top-pick. We also highlight Glu Mobile, the second pure play on mobile gaming on the stock market as a good trading idea at these levels. Last but not least, we still have US company Bitzio as a trading idea. Bitzio is also into app development, albeit on a far earlier stage in terms of product range compared to G5 and Glu. Nevertheless, it should be a spicy addition to a mobile technology oriented portfolio.

Nordic Investor


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