Samsung Cites Decrease in Smartphone Shipments as Reason for Q3 Revenue Decline

Samsung has announced an operating profit of KRW 0.67 trillion ($527 million) for the second quarter of 2023, slightly higher than the previous quarter, thanks to improved performance in its memory business. However, this figure is significantly lower than the KRW 14.1 trillion ($10.8 billion) operating profit reported in July 2022. The company’s latest earnings report also reveals a consolidated revenue of KRW 60.01 trillion ($47 billion), representing a 6 percent decline from the previous quarter and a significant drop from last year’s record-breaking KRW 77.2 trillion ($59.4 billion).

The company blames the decline in revenue mostly on a drop in smartphone shipments “due to the launch of the Galaxy S23″ in the first quarter. If you recall, Samsung’s mobile division did well in the previous earnings period thanks to strong sales of the Galaxy S23 series, especially the Galaxy S23 Ultra. Now, the division’s consolidated revenue has fallen from KRW 31.82 trillion ($23.7 billion) to KRW 25.55 trillion ($20 billion), while its operating profit fell by $500 billion.

Samsung expects the general smartphone market to recover in the second half of the year, especially in the premium market. Unsurprisingly, it plans to focus on the recently launched Galaxy Z Flip 5 and Galaxy Z Fold 5 series. The Galaxy Z Flip 5 has a 3.6-inch external display – the previous model had a 1.9-inch one – while the Galaxy Z Fold 5 has a new hinge that eliminates the gap between the two display halves.

Meanwhile, revenue for Samsung’s DS division, or memory business, improved slightly from 13.73 trillion South Korean won ($10.2 billion) in the first quarter to 14.73 trillion KRW ($11.53 billion). Its operating loss, while still huge at KRW 4.58 trillion ($3.4 billion), is at least slightly smaller at KRW 4.36 trillion ($3.4 billion). Going forward, the company plans to focus on selling “high value-added products” such as DDR5 and LPDDR5x components.