Samsung riding on a crest of success

An employee shows the curved screen of a new Galaxy S6 Edge smartphone device following its launch at a Samsung Electronics Co. news conference ahead of the Mobile World Congress in Barcelona, Spain, on Sunday, March 1, 2015. The event, which generates several hundred million euros in revenue for the city of Barcelona each year, also means the world for a week turns its attention back to Europe for the latest in technology, despite a lagging ecosystem. Photographer: Simon Dawson/Bloomberg

An employee shows the curved screen of a new Galaxy S6 Edge smartphone device following its launch at a Samsung Electronics Co. news conference ahead of the Mobile World Congress in Barcelona, Spain, on Sunday, March 1, 2015. The event, which generates several hundred million euros in revenue for the city of Barcelona each year, also means the world for a week turns its attention back to Europe for the latest in technology, despite a lagging ecosystem. Photographer: Simon Dawson/Bloomberg

Published Apr 1, 2015

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Jungah Lee Seoul

Samsung Electronics, struggling to retain its place as the world’s largest smartphone maker, just had an $11 billion (R133bn) month.

That is how much the South Korean company has added in market value since the March 1 introduction of its Galaxy S6 and S6 Edge, the smartphones that will compete against Apple’s new iPhones.

The shares have climbed 6.2 percent since the announcement for their best month since May 2014.

Samsung is counting on new payment software and a three-sided display on the S6 Edge to boost sales after slipping into a tie with Apple last quarter as the world’s biggest smartphone vendor. The Suwon-based company is being pressured at the high end by the iPhone 6 and 6 Plus and in the mid-range by Chinese manufacturers, including Xiaomi with its Redmi 2.

“There’s a lot of buzz about the new S6 phones and consumer demand,” said Lee Seung Woo, an analyst at IBK Securities in Seoul. “The pre-order demand for S6 devices is a lot higher than its predecessor S5 and the phone will win back many consumers.”

Samsung’s market value reached 212.26 trillion won (R2.3 trillion), at the close of trading in Seoul yesterday, or about 12.37 trillion won more than on March 1. Apple was worth about $736 billion (R8.9 trillion), a $12bn decline during the period.

Samsung was little changed in the same month a year earlier, when the S5 it unveiled at the Mobile World Congress in Barcelona received a tepid reaction. In the year that followed, models from Lenovo and Xiaomi eroded Samsung’s market share in emerging markets, including China and India, and Apple’s iPhone 6 lured away customers willing to pay more for the latest features.

The S6 phones have metal bodies and a fingerprint reader that works with the device’s payment software for added security. They will be released initially in 20 countries.

The phones won early praise from reviewers, with Forbes saying the use of glass and metal represents “great gains in terms of style.”

Operating profit will probably slump 36 percent to 5.4 trillion won in the quarter to March 31, according to the average of 35 analyst estimates compiled by Bloomberg.

The next quarter, which would include S6 sales, will generate about 6.7 trillion won, the estimates show. – Bloomberg

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