Samsung ended Q2 with a microscopic profit score, but the Galaxy S23 series was not to blame

2comments
We may earn a commission if you make a purchase from the links on this page.
Samsung ended Q2 with a microscopic profit score, but the Galaxy S23 series was not to blame
There was a time (not that long ago) when Samsung broke financial record after record with each passing calendar quarter, reporting mind-blowing sales and profit numbers derived largely from its industry-leading memory division.

Unfortunately for the world's top smartphone vendor, those days appear to be gone, with what was once the tech giant's most successful business turning into a serious money bleeder, but paradoxically, the company's mobile department yielding higher profits at a time of global stagnation for the market as a whole.

Yes, the Galaxy S23 family is a hit


Contrary to some reports and in line with others, the early 2023-released Galaxy S23, S23+, and S23 Ultra seem to have sold rather well around the world so far. While Samsung never shares exact shipment figures for individual handsets and handset lineups with the public, both the "volume and value" of the S23 series have apparently exceeded what the Galaxy S22 trio was capable of during the first half of 2022.


That being said, the "effect of the Galaxy S23 launch from Q1 faded" in Q2, which explains why Samsung's mobile hardware revenue dropped sequentially pretty bad, from close to 32 trillion won between January and March to around 25.5 trillion won in the April - June timeframe.

That's a decline of nearly 20 percent that strongly suggests worldwide demand for many Samsung phones dwindled as the S23 trio got "old" and the company's next-gen foldables drew close. Speaking of, the hot new Galaxy Z Flip 5 and Z Fold 5 are unsurprisingly highlighted as the key focus areas for the MX (Mobile eXperience) and Networks businesses going forward, especially following third-party projections of year-on-year growth for the global premium smartphone market segment in H2 2023.

Grab Z Flip 5 and save 29%; get Fold 5 for 24% off

Purchase a Galaxy Z Fold 5 or Flip 5 at the world's largest online retailer, Amazon. The 512GB Z Fold 5 currently sells for $425 off, and the Z Flip 5 with 512GB of storage in Mint is 29% off.

Galaxy Z Fold 5 (512GB): now up to $559 off with a trade-in

Currently, the Galaxy Z Fold 5 is only available with 512GB of storage at Samsung, plus it comes with a Verizon plan (no unlocked models available). You can save up to $559 on the smartphone with eligible trade-ins.
$1361
$1919 99
Buy at Samsung

Galaxy Z Flip 5: save up to $559 with a trade-in

Trade in your old phone and get up to $549 off on a new Galaxy Z Flip 5. The deal is live at the official store and applies to the clamshell foldable with 256GB of storage.
$440 99
$999 99
Expired

While both Samsung's mobile revenue and profit scores are down for the quarter compared to the first three months of 2023, the year-on-year change is almost shockingly positive as far as the latter indicator of success is concerned, with the division's financial gains jumping from KRW 2.62 trillion in Q2 2022 to KRW 3.04 trillion now. 

That's roughly equivalent to $2.5 billion and it's made that much more remarkable by the division's year-on-year dip in quarterly revenue from over 29 trillion won to the aforementioned KRW 25.55 trillion. In other words, Samsung somehow managed to derive more profit from selling fewer phones this quarter compared to last year's Q2, which is a very Apple move likely to keep investors relatively content despite...

Another huge memory loss!


How do you get from a DS (Device Solutions) division gain of nearly 10 trillion won in Q2 2022 to KRW 4.36 trillion in operating losses during this year's April - June window? It's all about memory chip demand, which has fallen at an alarming pace over the last year but could "gradually move toward stability" in H2.


That's some very careful language suggesting more potential woes on the horizon for this key Samsung business, which undoubtedly contributed to a modest overall operating profit of KRW 0.67 trillion in Q2 2023. 

That's extremely similar to the KRW 0.64 trillion gained during the first three months of this year, when the memory division also lost a whopping 4.58 trillion won, while representing a massive decline of 95 percent (!!!) compared to the overall profit score of Q2 2022, when DRAM and NAND chips were still sizzling hot.

Samsung's revenue, meanwhile, is also down from both Q2 2022 and Q1 2023 but not by anywhere near as much, still hitting a solid 60.01 trillion won, or around $46.8 billion. It remains to be seen if the company will ever be able to bounce back to serious profitability or if this negative trend will continue, putting Samsung in the red for the first time in... forever.

Recommended Stories

Loading Comments...
FCC OKs Cingular\'s purchase of AT&T Wireless