Samsung: group must ring the changes It is hard to pick holes in the world's largest technology group. Samsung Electronics primed investors for a 73 per cent year-on-year leap in fourth-quarter operating profit on sales up 12 per cent (admittedly buoyed by a one-off gain from the sale of a hardware unit). That follows a strong third quarter. The question is how long the strength of its business can be sustained. Key to Samsung's current success is its ability to adapt quickly and its presence in Asia's growth markets. As chips and flatscreen segments hit hard times, mobile phones now lead the company's growth. They accounted for 36 per cent of total sales in the third quarter, from 27 per cent a year ago. Thanks to its Galaxy smartphone, Samsung's phone division is also the most profitable: its operating margins of 16.9 per cent surpassed those in its semiconductor unit for the first time. Asia, meanwhile, accounts for more than half of the group's sales. Samsung smartphone handset shipments in China, for example, surged by more than 124 per cent in 2011, Nomura estimates. The group has about a quarter of the Chinese smartphone market. That is all very well, but consumers can be cruel, especially in Asia. A lack of fixed-term contracts and the urge to have the latest upgrade mean that a smartphone can go from leader to loser in a matter of months. In China, Samsung's GT smartphone model was the bestseller in November on the country's dominant eCommerce site, Taobao. It is now fifth, some way behind Apple's 4S. The travails of Nokia and HTC show the risks for mobile phone pure plays. And as phone makers tie up with software providers - Google's Motorola deal being an example - Samsung looks exposed without a partner, and too reliant on handsets alone. It cannot afford to lose its ability to adapt.