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Apple roars back to close smartphone gap with Samsung
By Rob Lever, with Sophie Estienne in New York
Washington (AFP) Jan 29, 2015


NEC says swings back to profit after smartphone overhaul
Tokyo (AFP) Jan 29, 2015 - Japanese information technology firm NEC said Thursday it swung back to profit in the nine months to December, after exiting the smartphone market as part of a broader restructuring.

The company said it earned 22.8 billion yen ($193 million) in the April-December period, reversing a 15.09 billion yen loss a year earlier.

Operating profit jumped to 35.6 billion yen from a profit of 23.7 billion yen a year ago, after the firm cut away its money-losing smartphone unit, but total revenue fell 3.9 percent to 2.0 trillion yen.

NEC fell into the red in 2013 due largely to losses stemming from the former smartphone powerhouse quitting the highly competitive sector, ending its development, production and sales of the devices.

It had merged its mobile phone handset operations with those of Casio Computer and Hitachi to fight off rising competition.

But the subsidiary still struggled in a market increasingly dominated by Apple and South Korean giant Samsung.

On Thursday, NEC pointed to a pickup in public-sector revenue, which rose 12 percent from a year earlier thanks to "steady sales from government offices and public services".

The company left its earnings forecast unchanged for the full year to March, predicting a net profit of 35 billion yen on sales of 3.0 trillion yen.

With its hot-selling large-screen iPhones released last year, Apple has roared back to the top of the pack with South Korea's Samsung in the smartphone market.

Surveys released Thursday showed the popular iPhone 6 and 6 Plus helped Apple pull to a virtual tie in the fourth quarter with Samsung, which has been the leader for the past three years.

The research firm Strategy Analytics said Apple and Samsung shipped 74.5 million smartphones each in the last three months of 2014 for a market share of just under 20 percent.

A separate survey by IDC analysts said Samsung had a tiny edge over Apple with 75.1 million units sold.

Apple "beat everyone's expectations," said Ryan Reith at IDC.

Even more surprising is that Apple managed to increase the average selling price of its phones at a time when many consumers around the world are looking to low-cost handsets.

Another surprise was growth of iPhone sales in the US, "which is considered a saturated market," according to Reith, and in China, where competition is intense.

"Sustaining this growth and higher (selling prices) a year from now could prove challenging, but right now there is no question that Apple is leading the way," Reith said in a statement.

Samsung, which belatedly entered the market pioneered by Apple, had dethroned the US firm as the world's top smartphone vendor in the third quarter of 2011.

The South Korean electronics giant then went on to replace Nokia as the global leader in overall mobile phone sales in the first quarter of 2012.

But Strategy Analytics said Samsung now faces "intense competition from Apple at the higher-end of the smartphone market, from Huawei in the middle-tiers and from Xiaomi and others at the entry-level."

"Samsung may soon have to consider taking over rivals, such as Blackberry, in order to revitalize growth this year," it added.

Even Apple has been surprised by its growth. Chief executive Tim Cook said during an earnings call this week that iPhone demand "has been staggering, shattering our high expectation."

IDC's Ramon Llamas told AFP that Apple is still seeing strong demand in early 2015 but that "it's going to be difficult to maintain that breakneck pace."

He added that "the fact that they attracted a number of Android users gives them growth prospects for 2015."

Analysts said the smartphone market appears to be diverging with Apple dominating the high end and other manufacturers scrambling at the low end.

"There's been so much skepticism for so many years about Apple's ability to continue to make its unique business model work over the long term, and Apple continues to prove them wrong," said Jan Dawson at Jackdaw Research in a blog post.

- Rise in China -

IDC said overall global smartphone sales hit a new record for the quarter and for the year: 375.2 million units shipped during the fourth quarter, a 28 percent increase from a year earlier, bringing the annual total to 1.3 billion, a gain of 27.6 percent.

Strategy Analytics said more than a billion Android-powered phones were sold last year, representing 81 percent of all handsets.

Chinese firms made headway in the smartphone market, led by Lenovo, which completed its acquisition of the Motorola brand last year.

IDC said Lenovo sold 24.7 million units for a 6.6 percent market share, edging out Huawei which delivered 23.5 million for a 6.2 percent share, according to IDC.

The rising Chinese star Xiaomi captured the number five spot, selling 16.6 million units with a 4.4 percent market share. Xiaomi's growth from a year ago was 178 percent, IDC said.

But "Xiaomi's grip on the number five spot is tenuous at best, with (South Korea's) LG and (China's) ZTE following close behind," the IDC report said.

soe-rl/dc

APPLE INC.

SAMSUNG ELECTRONICS


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INTERNET SPACE
Samsung posts first annual profit decline in three years
Seoul (AFP) Jan 29, 2015
Samsung Electronics posted its first drop in annual net profit in three years Thursday and saw resurgent arch-rival Apple barge in on its pole position as the world's top smartphone maker. The South Korean firm, whose key mobile phone operations have struggled in the face of intense competition from cut-price Chinese rivals, also warned that it expected 2015's "business environment... to be ... read more


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