RESOLVING THE LEDGER
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The company's chip division absolutely smashed it, though.
Chung Sung-jun/Getty Images How can one of the world's largest smartphone companies lose money by selling more smartphones than ever? I think we all know the answer: soaring memory prices caused by the AI boom. Samsung just announced that despite "solid" smartphone sales and growing revenue, its DX division (which includes mobile) posted its first-ever loss of 800 billion won ($544 million) in the company's second fiscal quarter.
"Although MX (Mobile eXperience) saw revenue growth year-over-year driven by solid sales of flagship products centered on the Galaxy S26 series and strong sales of the A series, operating profit decreased due to increased cost burdens across the industry, such as rising component costs," the company said. (The DX division also includes TVs and appliances, but the loss was primarily in the mobile MX category.)
Samsung emphasized that flagship-level products like the Galaxy S26 Ultra and Galaxy Z Fold 8 series performed well, profit-wise. However, budget phones struggled to show a profit due to higher component costs and already-thin margins (Samsung foreshadowed this possibility back in April). As a result, the company plans to focus on "high-value-added products" in order to drive growth in future quarters.
With all that, consumers can expect higher smartphone prices across all categories from Samsung and other brands. This inflation will hit low-income buyers the hardest, as prices for smartphones in the $200-500 category will likely rise the most, percentage-wise.
Samsung, of course, has a huge advantage over most manufacturers, as it also manufactures the memory and storage components used in smartphones. In that area, the company absolutely smashed it this quarter.
"The Device Solutions (DS) Division posted a [quarter-on-quarter] sales increase of 56 percent, with the Memory Business setting an all-time high for quarterly revenue and operating profit," Samsung wrote.
Overall, Samsung posted a record 171.5 trillion ($119 billion) won in consolidated revenue (up 28 percent from last year), an all-time quarterly high. Operating profit also hit an all time high of 89.5 trillion ($62.2 billion). "Earnings per share for both common and preferred shares increased by 52 percent to... among the highest levels for global tech companies," Samsung added. With all that money rolling in and shareholders happy, that puts less pressure on its mobile division — unless the AI bubble bursts, of course.
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