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Smartphone sales drive Samsung’s fourth-quarter profits

Estimated to have sold 63 million smartphones.

Samsung Electronics has posted a net income of 7.04tn Korean won (£4.2bn) for the fourth quarter of 2012, an increase of 76 per cent compared to the same period a year ago, despite tough competition from its rival Apple.

During the quarter, the company's handsets division posted an operating profit of 5.44tn Korean won (2011: 2.56tn Korean won), while displays unit, which made losses in third-quarter, turned to profits.

Strong performance of Galaxy line of smartphones and tablets during the quarter helped the company to achieve record profits. Although Samsung did not revealed exact number of smartphones sold, industry analysts estimate that approximately 63 million were sold during the quarter.

Lee Se-chul of Seoul-based Meritz Securities told the BBC: “Overall its earnings momentum remains intact. Smartphone shipments will continue to grow, even in the traditionally weak first quarter, as Samsung’s got a broader product line-up and Apple appears to be struggling in pushing iPhone volumes aggressively.”

The company, in a statement, said: “The furious growth spurt seen in the global smartphone market last year is expected to be pacified by intensifying price competition, compounded by a slew of new products.

“In the first quarter, demand for smartphones in developed countries is expected to decelerate, while their emerging counterparts will see their markets escalate with the introduction of more affordable smartphones and a bigger appetite for tablet PCs throughout the year.”

Cautioning on rising competition in the smartphone area, the firm decided to spend its capital this year on par with 2012 levels.