Samsung posted record profits in Q3 2018 which were largely contributed by its semiconductor division. This has been the case over the past few years. Samsung's mobile division hasn't contributed significantly to its record profit run. It's a similar story in Q3 2018.
The company revealed today that its mobile division has reported a drop in earnings “despite solid sales of its flagship smartphones.” It attributed the decline in earnings and profit due to a decrease in sales of mid- to low-end products. Overall smartphone shipments remained flat this past quarter.
Foldable and 5G phones to diversify Samsung's lineup
The mobile division earned 24.77 trillion won or $22 billion in revenue in Q3 2018 with just 2.2 trillion won or $1.9 billion in profit. That's almost a billion dollars less in profit made during the same period last year.
Samsung doesn't provide shipment figures in its earnings releases. However, it says that shipments remained flat in the quarter as increased competition in the affordable segment decreased sales.
The company now has a new strategy in place to try and regain its strong footing in the affordable segment. It blames the overall profit decline for the division on increased promotional costs as well.
Samsung predicts that its smartphone shipments will increase in the fourth quarter due to the year-end peak season. It predicts increased demand for newer models like the Galaxy A7 and Galaxy A9. Earnings are forecasted to take a dip owing to increased marketing expenses. Samsung expects competition to intensify across all segments of the market next year.
The company says that it's going to work harder to expand the sales of its premium handsets through a diversified lineup. It also promises to improve its competitiveness in the mid- to long-term by launching foldable and 5G phones.
We may get a peek at Samsung's foldable smartphone at SDC 2018 next week but it may not arrive until early next year. The 5G smartphone may also be due for an early 2019 release. Clearly, the company needs to do more in order to improve the performance of its mobile division.
