Heat is on Apple as Samsung soars

Samsung has smashed profit records, thanks to booming sales of its Galaxy smartphones, heaping pressure on its arch-rival Apple to introduce a new iPhone or risk losing market share.

The company, based in South Korea, said preliminary estimates show operating profits surged nearly 80 per cent in the last three months to as much as 6.9 trillion won (£3.9bn).

The group's decision to launch its Galaxy S III smartphone in May appears to have paid off, with industry estimates suggesting that Samsung's sales of smartphones overtook those of Apple. Samsung, a major sponsor of the Olympics, did not declare smartphone sales but analysts reckon it shipped between 48 million and 52 million.

Apple is expected to respond by launching a new iPhone, likely to be called iPhone5, in September. The battle has turned into a two-horse race as others such as Nokia and BlackBerry's owner RIM struggle.