What you need to know
- Samsung has posted 60.01 trillion KRW revenue earned in Q2, a 6% drop from Q1 2023.
- The drop was attributed to the sharp 24% YoY decline in the smartphone industry during Q2.
- Q2's downturn was predicted but Samsung remains confident that its recent foldables can turn things around going into Q3.
Samsung just hosted Unpacked, where it debuted its exciting new foldables, but the company followed the event by publishing its grim Q2 2023 earnings. According to the report, Samsung posted 60.01 trillion KRW ($47.01 million USD) consolidated revenue in the second quarter, a 6% decline from the first quarter. The company attributes its unfortunate revenue downturn to the "decline in smartphone shipments."
Samsung reports that its operating profits rose "sequentially" by 0.61 trillion KRW. This is primarily due to the company's DS Division, which deals in DDR5 and LPDDR5x, posting 14.73 KRW in consolidated revenue and 4.36 trillion KRW in operating profit.
However, as CNBC reports, this is a 22% slip in revenue when compared to Q2 2022 and a 95% YoY drop in operating profits. It's stated that smartphone OEMs are struggling with an overstock of memory chips after the shortage brought on by the pandemic. Unfortunately, due to consumers becoming hesitant with the industry, Samsung is suffering on the memory side as a result.
Samsung touched on its MX and Network businesses which saw 25.55 trillion KRW in revenue and 3.04 trillion KRW in operating profit. This was a decline after its "successful" first quarter due to the release of the Galaxy S23 flagship series. The company is also citing high-interest rates and price inflation as other probable causes for the decline in the mobile industry this past quarter.
Despite that, Samsung states the Galaxy S23 series did quite well over the Galaxy S22 series in both "volume and value."
Contributing to the poor figures, Counterpoint Research suggests that the overall smartphone market saw a 24% YoY decline in Q2 2023. While this was the third consecutive YoY quarter decline, Samsung observed a massive 37% drop in smartphone sales. It joined the likes of Motorola and Apple, which both saw declines this year — though Google actually rose by 48% year-over-year.
According to research analyst Matthew Orf, "consumer hesitation" was a major factor in Q2's market drop.
Q2 has been particularly rough on Samsung — but this was predicted. Meanwhile, it shifted the launch of the Galaxy Z Flip 5 and Fold 5 to get more of a head start in Q3. It's because of that Samsung continues to remain confident that the second half of 2023 will trend upward for its profits.
"We do also have to keep in mind that foldables honestly are not a huge part of it, even if they are the premium part of the market," Bryan Ma, vice president of devices research at IDC, told CNBC. "It's actually more of the traditional candy bar Galaxy S23 that really drives a lot of their profits at least in the premium part."
Samsung's MX Business will shift more focus toward its newly released tablet and smartwatches, as well, moving forward.
