Speculation is rampant that Samsung will acquire one of the European vendors
Samsung Telecommunication Systems revenue growth was driven by LTE deployments in 1Q12
Author: Michael Soper, Research Analyst
Last Updated: 04.27.12
While overall Mobile segment revenue and margin growth was spurred by handset sales, Samsung’s infrastructure business continued to improve
Samsung reorganized its Telecommunications segment into the IT & Mobile Communications division, which includes Mobile Communications, Telecommunication Systems, IT Solutions and Digital Imaging. While Mobile Communications makes up the bulk of revenue and operating profit due to the sizable handset business, Telecommunication Systems continues to grow and profit from the sale of LTE equipment and related services. TBR estimates Telecommunication Systems revenue grew 8% year-to-year.
We believe Samsung’s Telecommunications Systems business will benefit from the industry ramp up of LTE spend that will occur through 2012. With its end-to-end Smart LTE solution, Samsung is expected to win contracts from leading operators alongside larger network equipment providers (NEPS), such as Ericsson, Alcatel-Lucent and NSN. While Samsung would like to be selected as an exclusive equipment provider, it is typically selected as a secondary supplier, ceding the top position to its larger rivals. Revenue will continue to roll in from the company’s portion of Sprint’s Network Vision contract, which will shift into high gear in 2012, as Sprint doubles capex spend to $6 billion.
Although an acquisition would help Samsung compete with the larger vendors, it is unlikely to acquire in the telecom infrastructure space
With major infrastructure players NSN and Alcatel-Lucent struggling to grow revenue and make a profit, speculation is rampant that Samsung will acquire one of the European vendors. This is an unlikely scenario, as Samsung has stated that while it is open to acquiring, purchases would come in the fields of healthcare and energy. The company would prefer to organically grow its Telecommunication Systems business and not manage the integration of thousands of European-based employees into its ranks.
The article says that a purchase of one of the European vendors is unlikely, and points out Samsung does not want to "manage the integration of thousands of European-based employees into its ranks." Can't blame them. So, NSN is near the end of completing a cut of 17,000 employees, ALU is at the beginning of reducing just 5,500 employees. So, who is better set up for a purchase by Samsung? Then add to that the fact that NSN's owners have made no secret of how badly they want to sell the company, while Ben quite obviously is doing everything to avoid a sale. And if Samsung ever buys NSN and instantly becomes a major force, you can just place your call into bankruptcy court as it is all over for ALU. The idea of Ben Verwaayen taking on a company that has held its own against Apple is a sick joke.
[The idea of Ben Verwaayen taking on a company that has held its own against Apple is a sick joke.]
Samsung & Google/Android !!!!!!!....what you are missing is
The Next Chapter of the Internet...*Smart Grid*....particularly for China, India & Brazil.....you are, as many thousands of others are, not using this emerging multi-trillion dollar industry as part of the equation.