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The Korean giant enjoyed a record profit this quarter, racking up $42 billion in sales strengthened by Galaxy handsets. Samsung remains close behind Apple in smartphone sales, and raked in income with its semiconductor business.

Despite healthy profits and record-breaking revenue, the company's outlook may be clouded by contentious legal battles over patents as well as shifting dynamics among Android phone makers. Samsung endured blows from rivals and business partners alike, engaging in a drawn-out patent suit with Apple. It is making moves to diversity in light of software partner Google's plans to complete its acquisition of Motorola early this year, possibly weakening Samsung's affiliation with Android.

Samsung's partnership with Google rocketed Samsung smartphones to the number-two position since their market debut in 2010 on the wave of its Android-running Galaxy line. However, Google's recent acquisition of handset-maker Motorola leaves Android phone makers like Samsung unsure of their future relationship. Google's plans to develop its own hardware casts shadows on Samsung's usage on the Android platform, and Samsung is looking at new potential software partners, like Intel.

The South Korean company also launched its Wave handset series using its own Bada OS. Samsung invested heavily in Bada last year, opening up the platform to encourage app developers. While Android sales dwarf Bada, Samsung's investment in its own OS demonstrates its commitment to reduce its dependence on Android.

Samsung's relationship with Apple is even frostier. Apple buys the largest percentage of Samsung's chips and processors, which are integral parts of the iPad and iPhone, establishing a mutually beneficial relationship. When it comes to mobile handsets, however, the two companies are locked in a tense patent battle and tussle for increased shares of the high-end smartphone market.

Apple is winning most of the patent battles, including heated court cases in Italy, Australia, and Germany. Apple began the litigation, but Samsung petitioned for bans of Apple products as well, miring the companies in extensive, expensive hearings. Samsung's recent court losses may follow it into the new year, and the company may need to review the expensive legal strategy, which has yielded small dividends so far.

Samsung's difficult relationships with Apple and Google are likely to affect its future profits if the company cannot extract itself from its legal woes or wean itself from reliance on Android. The company will benefit from mending ties with Apple and diversifying its offerings, offering insurance in light of the growing patent battles and a looming Google-Motorola partnership.