Samsung Mobile in crisis, third-quarter profit could sink 25%

Samsung Mobile Experience division is in crisis, with a 25% profit sink likely in the third-quarter. Samsung’s aggressive marketing and Galaxy AI strategy paid off, but less than expectations – resulting in operating profit harm in Q3.

South Korea’s FNGuide reports that the Samsung Mobile division could generate an operating profit of 2.6 trillion won in the third-quarter. The estimation indicates a 25% decrease compared to the same period last year.

Foldables are to be blamed?

Back in July, Samsung launched new foldable smartphones, powered by Galaxy AI. The Z Fold 6 comes with a slightly wider screen made possible through design refinements. However, the Z Flip 6 has no changes from its predecessor in looks.

Thanks to Galaxy AI, Samsung’s Z6 foldables garnered attention. Their performance has been weaker than expected given the slow pace of recovery globally. The Galaxy S24 series sales were also not impressive despite the swift pace after launch.

The South Korean tech giant is implementing measures such as cost-cutting for processors. Still, industry experts suggest that improving software competitiveness is essential for creating new revenue streams.

After Galaxy AI-powered S24, Z Flip 6, and Z Fold 6, Samsung strengthened its AI ecosystem with the Tab S10 series and the S24 FE. Despite this much effort, the performance of the MX division has not shown signs of recovery.

IDC reported that Samsung led the smartphone market in the second quarter with an 18% share. Despite fierce competition, Apple was the runner-up with a 16% share, while Xiaomi retained its third rank with a 15% market share.