Samsung has posted a record $4.7 billion quarterly profit that is largely based on the success of smartphone sales during the holiday buying season. The South Korean company also announced plans to spend $22 billion this year to increase chip and flat screen panel production to further gain leverage against smaller rivals.

Total revenue for Q4 2011 was reported at around $42 billion, good for a 13 percent increase year-to-year. Net profit was recorded at around $3.6 billion. For the full year, Samsung reported an operating profit of roughly $7.4 billion.

But it was the smartphone sector that shined the brightest for Samsung. The company earned nearly $16 billion during the quarter which is an increase of 52 percent over the same time period a year ago. Strong sales of the Galaxy S II and Note smartphones were cited, although specific sales figures were not released.

Samsung also recently launched the Galaxy Nexus as the first smartphone to run Android 4.0 Ice Cream Sandwich. Furthermore, the company introduced the Note to the US market during the 2012 CES earlier this month in Las Vegas, although it was received with mixed initial reactions.

"Despite intensified competition amid the global economic slowdown, our Telecommunications businesses continued to post solid earnings with an enhanced line-up of high-end smartphones, resulting in higher average selling price (ASP)," said senior VP and head of investor relations Robert Yi.

Despite the tremendous success of Samsung’s smartphone business, it was Apple that ultimately won the worldwide smartphone battle by a very narrow margin as the top vendor in Q4, according to research firm Strategy Analytics.

Image courtesy Mobirolla.