Samsung blames Q2's drop in revenue on decline in smartphone shipments

It will focus on its new foldables over the next months.

JUNG YEON-JE via Getty Images

Samsung has reported KRW 0.67 trillion ($527 million) in operating profit for the second quarter of 2023, which is just slightly higher than last quarter's, thanks to its memory business posting a narrower loss. That figure is also, however, much, much smaller than the KRW 14.1 trillion ($10.8 billion) operating profit it posted in July 2022. In its latest earnings report, the tech giant also revealed a consolidated revenue of KRW 60.01 trillion ($47 billion), which represents a 6 percent decline from the previous quarter's and a far cry from last year's record-breaking KRW 77.2 trillion ($59.4 billion).

The company blames the drop in revenue mostly to a decline in smartphone shipments "as the effect of the Galaxy S23 launch" in the first quarter faded. If you'll recall, Samsung's mobile division performed well the previous earning period due to the strong sales of the Galaxy S23 series, specifically the Galaxy S23 Ultra. Now, the division's consolidated revenue has slipped from KRW 31.82 trillion ($23.7 billion) to KRW 25.55 trillion ($20 billion), while its operating profit dropped by $500 billion.

Samsung expects the overall smartphone market to pick back up in the second half of the year, especially in the premium market. Unsurprisingly, it plans to focus its efforts on the newly launched Galaxy Z Flip 5 and Galaxy Z Fold 5 series. The Galaxy Z Flip 5 boasts 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 gets rid of the gap between the two screen halves.

Meanwhile, Samsung's DS Division or memory business experienced a slight recovery in revenue from KRW 13.73 trillion ($10.2 billion) in Q1 to KRW 14.73 trillion ($11.53 billion). Its operating loss, while still massive at KRW 4.58 trillion ($3.4 billion), is at least a bit smaller at KRW 4.36 trillion ($3.4 billion). Going forward, the company plans to focus on the sale of what it calls "high-value-added products," such as DDR5 and LPDDR5x components.

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