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Samsung's quarterly results confirmed the recovery of the handset market, following a storming comeback by Nokia, solid performance at LG, a better showing from Sony Ericsson and even signs of life at Motorola. The first estimates of cellphone market size for the fourth quarter of 2009 indicate a 10% growth, with an 8% rise in the current period. And within that, Samsung has moved up the rankings to claim 20% share for the first time ever.

This indicates the increasing concentration of handset power with just a few giants, as Nokia gets back to its benchmark share of 40% and its nearest rival achieves 20%, even as LG makes progress too, in ensuring it will never be overtaken again by Motorola or SEMC, and that it edges closer to its compatriot. In the first period of unit growth for five quarters, with a 10% improvement on Q408, Nokia and Samsung were the only firms to gain share, at the expense of the rest of the big five plus more specialist players.

Samsung has promised to increase its standing in the overall cellphone market this year by concentrating more on the segment it has somewhat neglected, open OS smartphones. Even before the results of that strategy kick in, it has seen phones boosting its group performance considerably, although its chip business is the biggest profit generator. It expects that to continue in 2010, while phones and televisions will be the main growth engines, and could propel it to overtake Hewlett Packard to become the world's largest technology firm by sales this year.

The company earned KRW3.05 trillion ($2.6bn) in the quarter, a strong comeback from the loss of KRW20bn ($14m) a year earlier. That was Samsung's first net loss since it started reporting quarterly results in 2000. However, Q409 did not quite reach the dizzy heights of the previous quarter - in Q309 Samsung made a record profit of KRW3.72 trillion. Revenue in Q4 was KRW25.3 trillion, up 37%. Samsung will switch to international accounting standards from the current quarter. Under that consolidated method, Samsung said its Q4 operating profit was KRW3.7 trillion and sales were KRW39.2 trillion.

The biggest turnaround was in the semiconductor business, whose operating margin reached its highest level since 2006, at 22.6%, up sharply from 17.6% in the third quarter as memory chip seasonal cycles improve. Executives said they would target a slightly higher operating margin of around 10% in the cellphone business during 2010. Q409 saw moves in the right direction, with margin up from 7.7% in the third quarter and just 2% a year earlier, to 8.3%.

However, further improvement will be tough at the same time as investing in the R&D and marketing to boost smartphone share. Samsung has only about 3% of the open smartphone segment, though it thrives in high end mediaphones such as the 1GHz Jet, which run its own OSs.

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