Samsung achieves record quarterly profit

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SAMSUNG Electronics posted record quarterly profit of $5.15bn, driven by booming sales of its smartphones and the Galaxy Note “phablet”, which it hopes will show it has a flair for innovation to match rival Apple.

The Note – part phone, part mini-tablet – with a throwback stylus and screen half the size of the iPad, has sold more than five million since launching in October, and is proving a surprise money earner for the South Korean electronics giant that has a reputation as a “fast follower” rather than design leader.

“Higher-than-expected shipments of the Galaxy Note seem to have given an upside to earnings,” said an analyst. “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, which raced to the top of the global smartphone rankings last year with close to a fifth of the market, from only three per cent in 2009, is set to go head-to-head with Apple this quarter with the expected launch of a revamped Galaxy S, its flagship smartphone, and Apple’s next iPhone.

The Note sits somewhere between a small tablet and a big smartphone, and its early success illustrates that a maturing mobile device market can open up new opportunities as users and manufacturers experiment with form.

Samsung has driven the Note with its marketing and distribution clout. Design chief Lee Minhyouk put it together as a smartphone “taboo breaker”, increasing the pressure on gadget strugglers HTC, Nokia and BlackBerry.