Samsung's semiconductor businesses had sales of 9.48 trillion won ($8.6 billion), a drop from last quarter.
But the company said its telecommunications business hit a record in quarterly sales of 14.9 trillion won ($13.4 billion) — a 37 percent increase from last year — with growth mainly due to strong Galaxy smartphone sales.
Jae Lee, a Daiwa Securities technology analyst, estimated that Samsung had shipped about 28 million smartphones in the third quarter, up from about 20 million last quarter, and had surpassed Apple's iPhone shipments. Samsung spokesman Nam Ki-yung wouldn't comment on whether Samsung had passed Apple Inc. in smartphone sales, saying the company no longer provides its sales figures for handsets. The Suwon, South Korea-based company said its handset revenues were 14.42 trillion won ($13 billion) in the third quarter, a 39 percent jump from last year, and it forecast strong sales.
"Looking ahead into the fourth quarter, when industry demand is traditionally at its peak, Samsung expects sales of mobile devices to remain strong and flat panel TV shipments to increase," the company said in a statement. Apple says the product design, user interface and packaging of Samsung's Galaxy devices "slavishly copy" the iPhone and iPad. Samsung fought back with lawsuits of its own, accusing Apple of patent infringement of its wireless telecommunications technology.
Earlier this month, Samsung asked Japanese and Australian courts to block sales of Apple's new iPhone 4S in those countries over alleged patent violations. Samsung is also appealing an Australian court's decision to temporarily ban sales of Samsung's new Galaxy tablet computer. In an attempt to win sales in the market between smartphones and tablet PCs, Samsung on Friday unveiled a new Galaxy Note, Yonhap news agency reported.
Samsung's net profit has slid 23 percent in the third quarter despite strong smartphone sales.
Samsung said Friday it earned 3.44 trillion won ($3.08 billion) in the three months that ended Sept. 30. Samsung earned 4.46 trillion won ($4 billion) during the same period last year.
Samsung says its telecommunications businesses saw all-time high quarterly sales of 14.9 trillion won ($13.4 billion). The company says the growth was mainly due to strong Samsung Galaxy smartphone sales.
Samsung announced Friday that it either shipped or sold (reports differ) 27.8 million smartphones last quarter, easily outpacing the 17.07 million iPhones that Apple sold in the same period. Even if Apple sells 25 to 30 million iPhones in the holiday quarter, as various analysts predict, Samsung is likely to retain its lead.
Samsung, for example, reported profits of $2.2 billion from smartphone sales last quarter, 60% of the electronic giant's total.
iPhone sales last quarter, while less than expected, generated revenues of nearly $11 billion (39% of Apple's total). Samsung Electronics Co overtook Apple Inc as the world's top smartphone maker in the July-September period with a 44 percent jump in shipments, and forecast strong sales in the current quarter in a clear warning to its rivals.
Apple introduced its first iPhone in 2007.
Apple and Samsung will continue to dominate the market in the fourth quarter," said Kim Hyun-joong, a fund manager at Midas Asset Management, which owns Samsung shares.
Apple's iPhone sales shrank by 16 percent to 17.1 million units in the third quarter. Samsung had 23.8 percent of the global smartphone market in the third quarter, 9 points higher than Apple. Samsung's flagship Galaxy line of products is powered by Google's Android software.
Samsung shares were up 1.6 percent by 0500 GMT (1 a.m. EDT), versus a 0.6 percent gain in the wider market.
"Looking ahead into the fourth quarter, when industry demand is traditionally at its peak, Samsung expects sales of mobile devices to remain strong and flat-panel TV shipments to increase," the company added in an earnings statement. Samsung's phone division reported a 16.9 percent operating margin, which further takes account of marketing costs. Nevertheless, Samsung faces challenges as the new iPhone introduced earlier this month is notching up strong sales. Samsung on Thursday announced the launch of its Galaxy Note mobile device, adding to the flagship Galaxy lineup of products. Samsung was the sole profitable firm among major global dynamic random access memory (DRAM) chip makers in the third quarter.
Samsung's chip business is also benefiting from strong demand for mobile processor chips used in Apple's iPhone and iPad tablet as well as its own Galaxy smartphones.
Samsung's display business posted losses for a third consecutive quarter on weak demand for TVs and PCs.
Samsung zoomed past Apple to take the smartphone crown in the third quarter, and become the biggest mobile phone maker by revenue, after it announced strong growth in its handset division as part of its quarterly results.
Apple meanwhile has dropped from being the biggest smartphone maker and mobile phone company by revenue in the second quarter to rank behind Nokia and Samsung in revenue.
Samsung did not give any indications about tablet shipment figures for the quarter in its earnings release.
Apple had mobile revenues of $10.98bn (£6.8bn) for the quarter.
Group revenues grew by 3% to 41.27tn won.
A Samsung spokesman, Nam Ki-yung, wouldn't comment on whether Samsung had passed Apple in smartphone sales, saying the company no longer provides its sales figures for handsets. Samsung did say, however, that handset shipments jumped more than 20% from the previous quarter, and that its global smartphone sales were up fourfold from last year.
Samsung's semiconductor businesses had sales of 9.48tn won, a drop from last quarter.
Samsung also said the third quarter saw increased demand for flash chips used in mobile devices and enhanced revenue in the business that creates mobile application processors and image sensors.
Apple says the product design, user interface and packaging of Samsung's Galaxy devices "slavishly copy" the iPhone and iPad. Samsung is also appealing against an Australian court's decision to temporarily ban sales of Samsung's new Galaxy tablet computer.
In an attempt to win sales in the market between smartphones and tablet PCs, Samsung on Friday unveiled a new Galaxy Note, the Yonhap news agency reported.
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