Samsung Stops Bleeding With Smartphones, Tablets

The South Korean company said smartphone sales, including its Galaxy S series, jumped by 18 percent, compared to a year ago, giving the company $1.3 billion in profits for this sector. But Samsung faces fierce competition from Apple and other Android device makers like HTC.

Samsung and Apple are also locked in a legal battle over patent rights. And in a twist, Apple is one of Samsung's biggest customers for memory chips, displays and processors.

That means Samsung stands to gain from Apple's success. The Cupertino, Calif.-based company is expected to release the iPhone 5 this fall, and sell a projected 100 million units by the end of 2011.

Samsung semiconductor division, which makes components for tablets and other devices, saw a 70 percent rise in first quarter sales, helping to buoy the company. But despite its successes with smartphone, tablets and semiconductors, it warned of difficulities ahead.

"We forecast that the challenging business conditions will persist in the second quarter, effected by lingering worries over the global economy and tight competition in consumer electronics and mobile businesses," the company said.

The South Korean company's profits decreased by 30 percent to $2.6 billion, with traditional mobile phone sales falling by 14 percent to 70 million devices sold. It also reported that LCD panel profits fell as TV demand shrank and prices dropped. PC component sales dropped by 4 percent.