Rich Fiscus
17 Jan 2012 16:47
It's hard to imagine how Samsung could have had a better year in 2011. It seemed like everything they touched turned to gold.
Android smartphones flew off the shelves, building on the foundation laid by the Galaxy S in 2010. Starting with the Galaxy S II and continuing with numerous other models, they even partnered with Google for the latest Nexus. Thanks to that partnership, the Galaxy Nexus was even the launchpad for Android 4.0 Ice Cream Sandwich.
Samsung reversed their fortunes in the TV market after a weak 2010, with sales really picking up steam in November. At year's end they added an exclamation point by buying out Sony's stake in their joint TV venture. Despite relatively good sales, TVs have been one of many culprits for Sony's recent financial woes.
This year analysts expect Samsung to invest much of last year's windfall on continued product development. Based on the wide range of TV and Blu-ray developments they showed off at CES last week, and a major smartphone chip initiative announced last month, they appear to have plenty of projects to spend a reported $41.4 billion.
Analysts say 80 percent of that money will be spent on capital investments to increase and upgrade manufacturing capabilities. A significant portion is likely destined for the smartphone processor plant they are opening in partnership with Panasonic, NEC, Fujitsu, and Japanese mobile carrier NTT DoCoMo.
The new factory could be Samsung's most important project of 2012, particularly if a rumor about Apple switching to a Qualcomm processor for the next iPhone is true. Of course a previous report that Apple was ditching Samsung proved false. Patent issues aside, Apple could easily stay with Samsung if that's what it takes to get the processor they want.
In either case, their experience working with Apple has likely paid dividends in their own chips. If their Apple business ends with this year's iPad, they should be well positioned for the future. Once they have a LTE solution ready, they should be able to compete with anybody. It should also improve performance in future AT&T phones, most of which use Qualcomm LTE solutions right now.
Their current processors, should also find homes in Smart TVs and Blu-ray players. Featuures like Google TV, network DVR clients, and UltraViolet Blu-ray player apps were all on display at CES. Some of the TVs will also need OLED displays, which is another area where Samsung will want to boost production. Even aside from TVs, Samsung makes most of the OLED displays used in smartphones and tablets.