Samsung has ordered a full revision of its phone business model
Faced with the general phone market malaise, Samsung’s financial department has reportedly ordered a complete revision of its business model, together with the TV department that saw LG beat its performance handily.
To offset the Q2 performance forecast, Samsung is allegedly planning to pull the announcement of its 2023 foldables much earlier than usual. The Galaxy Z Fold 5 and Z Flip 5 Unpacked event may be held as soon as July 19 or July 26, with their launch scheduled for either August 11, or as early as August 4, three weeks before the release of their predecessors.
Samsung’s financial doldrums are actually stemming mostly from its heretofore high-flying chip business which logged its first loss in 14 years, as the market for computers is in its post-pandemic trough and Samsung’s customers are still working through a huge inventory build-up they amassed during the supply chain crisis in the past couple of years.
The Device Experience (DX) division, in its turn, logged a decent increase in its year-on-year profits to the tune of $262 million. It houses not only the smartphone business, but also TVs, home appliances, and networks.
If we dive deeper into the DX department’s performance, however, Samsung’s phone and network divisions managed to score 3.94 trillion won (about $3 billion) in profits, which is an actual $90 million increase from the Galaxy S22 launch period last year.
This is partially due to the strong performance of the Galaxy S23 Ultra sales as Samsung made it the most advanced Android phone out there, complete with a 200MP main camera, S Pen silo, and a 10x periscope zoom. Still, its stellar sales performance wasn’t enough to offset the drastic decrease in profits from Samsung’s TV or home appliances business in Q1, let alone the chip division.
It would be interesting to see what will come out of Samsung’s phone business revision, hopefully as slimming down of the portfolio of versions and models would be in store and an eventual cost cutting won’t affect its innovation potential. The sheer fact that Samsung may be pulling the Galaxy Z Fold 5 and Z Flip 5 release forward, however, suggests that there are already movers and shakers in its smartphone division.