Samsung Electronics Co. has surpassed Apple Inc. as the world's top smartphone manufacturer during the July-September period, with an increase of 44 percent in shipments. The South Korean technology giant has also forecasted strong sales in the current quarter.

While the Apple iPhone first came to the market in 2007, Samsung entered the smartphone market only last year. However, thanks to a smooth production system that rapidly brings new products, its sales have soared at a speedy rate.

In the handset division, Samsung has no real rival models to challenge its products except for the iPhone 4S. Apple and Samsung will continue to dominate the market in the fourth quarter, Reuters quoted Kim Hyun-joong, a fund manager at Midas Asset Management, which owns Samsung shares, as saying.

On Friday, Samsung announced the profit of its telecom division. As per the announcement, the profit has doubled from a year ago to a record $2.2 billion and accounted for 60 percent of Samsung's total profit.

According to data provided by research firm Strategy Analytics, shipment of Samsung smartphones rose 44 percent from the earlier quarter to 27.8 million units, which is almost four times from a year ago.

A Tough Time for Apple

Apple, on the other hand, had a tough time during the third quarter. Its iPhone sales came down by 16 percent to 17.1 million units. Samsung enjoyed 23.8 percent market share of the global smartphone market  in the third quarter, which was 9 points higher than Apple.

During the third quarter, Apple sold fewer phones, as customers held off buying iPhones until the October launch of the latest iPhone 4S, Reuters reported.

In terms of revenue, Samsung reported a $3.8 billion operating profit for the July-September quarter. Although it was down from $4.4 billion a year ago, it was, nevertheless, up from the $3.4 billion figure in the previous quarter.

Positive on Q4

Considering gains from its $1.4 billion sale of its hard disk drive business to Seagate Technology, Samsung is hopeful that its fourth-quarter earnings could be higher than the third.

The company's chip business is also generating profits, as a result of strong demand for mobile processor chips used in Apple's iPhone and iPad, as well as its own Galaxy smartphones.

Looking ahead into the fourth quarter, when industry demand is traditionally at its peak, Samsung expects sales of mobile devices to remain strong and flat-panel TV shipments to increase, the company said in an earnings statement.

Competition is Still on

Despite strong sales, Samsung still faces challenges from Apple as the new iPhone 4S introduced earlier this month is notching up record-breaking sales. Introduced in 2007, iPhone's touch screen template has been adopted by many of its rivals. However, it still remains the gold standard in the smartphone market. Nokia has also joined the party, with phones based on Microsoft's Windows software.

On Thursday, Samsung launched its Galaxy Note mobile device. Powered by Android 2.3(Gingerbread), the new device will compete against a series of new handsets released by Apple, Nokia and HTC Corp.