Samsung Hit by Sliding Mobile Phone Margins

Samsung Electronics posted an increase in its year-over-year net income during the first quarter, although, despite record shipments during the quarter, the company’s results were hit by declining margins in its cell phone business.

The company reported net income of $1.96 billion, up from $1.56 billion a year ago. Revenue was up slightly, too, but operating profit was down 25 percent year-over-year.

Samsung shipped 29 million handsets in the first quarter, setting a record and coming close to its forecast of 29.5 million. The company shipped 27.2 million units in the fourth quarter and 24.5 million in the comparable period a year ago. The operating margin for the telecom unit came in at 10 percent, down from 17 percent a year ago.

Samsung holds the spot as the third-largest global handset maker. Nokia and Motorola hold the first and second spots, respectively.

Samsung unveiled the t509, an ultra-thin bar-style phone measuring 9.8 mm thick. The handset supports high-speed EDGE connectivity as well as Bluetooth capabilities and features a host of multimedia capabilities, including entertainment, streaming video, messaging and an integrated camera.[3G!]

Read more: Wireless Week