Galaxy Note ‘phablet’ helps spark Samsung’s big quarter

April 6, 2012
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The South Korea-based Samsung Electronics reported a record quarterly profit of 5.8 trillion won ($5.1 billion) for the three months ending March 31, up from 2.95 trillion won a year earlier. The average estimate of Samsung’s profit for the quarter by a group of 32 analysts contacted by Bloomberg was only 5 trillion won. 

Late last month Samsung reported that the Galaxy Note, a 5.5-inch kind of over-sized smartphone with tablet capabilities, had sold over 5 million units. The hybrid nature of the device has led some to call it a “phablet” (a combination of smartphone and tablet). 

"Higher-than-expected shipments of the Galaxy Note seem to have given an upside to earnings," Lee Ka-keun, an analyst at Hana Daetoo Securities, told Reuters. "Note sales will increase further in the second quarter, and handset profit will grow despite a rise in marketing costs related to the London Olympics.  

Samsung sells a range of Android-based, Galaxy Tab tablets in different sizes, including 7.7-, and 10.1-inches. But the Galaxy Note has been a surprise hit since it’s release in Europe last October and more recently in the U.S. While Apple discounted the need for a stylus the iPhone and later iPad products in favor of finger touch input, the Note can be used with either finger or stylus input and includes custom software for various stylus applications such as drawing and appending documents.

Samsung probably sold 44 million smartphones in the first quarter, more than tripling from a year earlier, Matt Evans, a Seoul-based analyst at CLSA Asia-Pacific Markets, said in an April 2 report. That would exceed Apple’s shipments “by a significant margin,” making Samsung the top smartphone seller during the three-month period, according to the report which counts the Note as a smartphone. 

The company has proven to be innovative on the marketing front as well with a controversial ad for the Note that subtly mocked Apple fanboys for waiting in line for the latest iDevice (though at the time the Note wasn't available in the U.S.). More recently a YouTube video showing an elephant using its trunk to draw on the handheld Galaxy Note has gone viral with over 2 million views. 




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