Samsung bets big on upcoming flagship phones to boost sales in Q3

Samsung, set to showcase its new line-up of flagship mobile devices next week, suffered a sales decline in its IT and mobile communications division in the second quarter but its performance was better than expected owing to efficient cost management, including reductions of marketing expenses and offline promotions.

The mobile business unit posted 20.75 trillion won in sales in the second quarter, down 19.7 percent from a year earlier, but the unit’s operating profit surged 25 percent on-year to 1.95 trillion won, the company announced on Thursday.

“Amid lockdowns in regions including North America and Europe and store closures due to the global impact of Covid-19, overall market demand decreased and the company’s smartphone shipment and revenue declined from the previous quarter,” it said.

The company now projects a gradual recovery in demand for its mobile devices, with a sales increase expected in the third quarter.

“Looking ahead to the third quarter, smartphone sales are expected to rise (QoQ), backed by a stronger product mix thanks to the launch of new flagship models, including the Galaxy Note and a new foldable phone, to be introduced at the upcoming virtual ‘Galaxy Unpacked’ event on August 5,” informed the company.

For the second half, the overall mobile market is expected to show a gradual recovery.

“However, uncertainties related to Covid-19 will continue to persist, with market competition expected to intensify as companies strive to make up for weak performance during the first half,” said the company.

Amid increased market uncertainty, the company said it will respond timely to recovering demand in various regions by launching new flagship models as well as strengthening its mass-market lineup.

Samsung said it will continue efforts to enhance profitability through optimising product portfolio, building on the improvement in profitability in mass market models since last year.