Samsung ‘blames’ smartphone market for revenue decline in Q3 2023

South Korean tech giant Samsunghas posted a $527 million operating profit for the second quarter of 2023. The profit from the latest quarter is slightly higher than last quarter’s. Samsung’s memory business has helped the company to end the quarter with a higher profit than the previous quarter. However, the latest number is much lower than the $10.8 billion operating profit the company posted in July 2022.In its latest earnings report, Samsung revealed a consolidated revenue of $47 billion for this quarter. The consolidated revenue accounts for a 6% decline from the previous quarter. To compare, Samsung posted a ‘record-breaking’ revenue of $59.4 billion in 2022.

Smartphone shipments are to blame for the decline
Samsung has blamed the drop in revenue mostly due to a decline in smartphone shipments. The company noted that “the effect of the Galaxy S23 launch” faded in the first quarter. Last quarter, Samsung’s mobile division performed well due to the strong sales of the Galaxy S23 series, specifically the Galaxy S23 Ultra model. In this quarter, the company’s mobile division’s consolidated revenue dropped from $23.7 billion to $20 billion. Meanwhile, the operating profit of the division dropped by $500 billion.

Samsung hopeful about smartphone shipments
Samsung expects the overall smartphone market, (especially the premium smartphone market) to get a boost in the second half of 2023. The company also noted that it will focus its efforts on the newly launched Galaxy Z Flip 5 and Galaxy Z Fold 5 series.

For the unaware, the Galaxy Z Flip 5 sports a 3.6-inch external display compared to the 1.9-inch one available in the last year’s version. On the other hand, the Galaxy Z Fold 5 has a new hinge that removes the gap between the two halves of the screen.

How Samsung’s other divisions performed
Samsung’s DS Division which is its memory business also experienced a slight recovery in revenue. The unit’s revenue increased from $10.2 billion in Q1 to $11.53 billion in Q2. This division’s operating loss has also slightly reduced from $3.4 billion last quarter. In the coming days, the company even plans to focus on the sale of its “high-value-added products,” which include DDR5 and LPDDR5x components.