Will the new Galaxy foldables be the savior? Samsung puts more weight on premium products [Samsung posts record second-quarter results]

Samsung Electronics' Mobile eXperience (MX) and Network (NW) businesses posted a quarterly loss for the first time since their launch. The increase in costs was driven by surging prices for smartphone DRAM and NAND flash memory, as demand for memory used in AI servers jumped sharply. Samsung Electronics plans to restore profitability in the second half by boosting sales of premium products such as Galaxy foldables and the S26 series, while also diversifying its service business.
According to Samsung Electronics' second-quarter results released on the 30th, the MX and NW businesses posted sales of 33.2 trillion won and an operating loss of 700 billion won. Sales rose about 14% from 29.2 trillion won a year earlier, helped by strong demand for flagship models centered on the Samsung Galaxy S26 series and the Samsung Galaxy A series. Operating profit, however, fell from 3.1 trillion won to a loss of 380 billion won over the same period, marking a shift into the red. The network business improved from a year earlier and from the previous quarter, supported by higher overseas sales. The overall loss was effectively driven by the cost burden in the MX business.
The biggest factor behind the weak performance was the sharp rise in memory prices. Market researcher TrendForce forecast that the average selling price of LPDDR5X, a low-power mobile DRAM, would rise 78% to 83% from the previous quarter in the second quarter of this year. As higher costs were passed on to handset prices, consumer demand weakened. According to Counterpoint Research, global smartphone shipments in the second quarter fell 11% from a year earlier. It was the lowest second-quarter figure since 2013.
Samsung Electronics expects memory prices to keep rising and the smartphone market to remain sluggish in the second half as well. It plans to improve profitability by increasing the share of flagship products and strengthening upselling of mid- and low-priced models. Daniel Araujo, an executive in Samsung Electronics' MX Business, said during the earnings conference call on the day, "We will maintain the sales momentum of the Samsung Galaxy S26 series and expand sales of premium products set to launch in the second half, including the Samsung Galaxy foldable series, the Samsung Galaxy Tab S12 and the Galaxy Watch Ultra 2." He added, "We will also step up efforts to expand upselling for the Samsung Galaxy A series." The strategy is to broaden the application of key Galaxy AI features to the mid- and low-priced Galaxy A lineup and increase sales centered on higher-end models such as the A57 and A37.
Samsung Electronics took the No. 1 spot in the global smartphone market in the second quarter, led by the Samsung Galaxy S26 series. The Samsung Galaxy Z8 series, unveiled on the 22nd, also saw live-commerce sales on the first day of domestic preorders more than double from the previous model. The Samsung Galaxy Z Fold 8 appears to be leading sales.
The company is also reviewing ways to generate revenue through the expansion of its service business. Araujo said, "Rather than focusing on short-term profit generation, we are concentrating on delivering premium value that provides hyper-personalized experiences for each user." He added, "We plan to develop this step by step, taking into account service completeness and global customer acceptance."
[email protected] Choi Hye-rim Reporter