Samsung Electronics’ mobile division forecast smartphone shipments to increase in the second half of 2024 after recording stable revenue growth in Q2, though profitability declined due to the rising price of components.

Mobile eXperience (MX) and Networks sales rose 7 per cent year-on-year to KRW27.4 trillion ($19.9 billion), while operating profit dropped 26.6 per cent to KRW2.2 trillion. Shipments of smartphones increased 18.9 per cent to 54 million units and tablets 16.7 per cent to 7 million.

Smartphone ASP improved 7.7 per cent to $279.

On its earnings call, Samsung MX VP Daniel Araujo noted the mobile unit recorded double-digit profitability in the first six months of 2024.

Araujo said overall demand for smartphones in H2 is expected to increase year-on-year, with its premium segment being driven by growing demand for AI and the launch of new models.

“We aim to expand sales of foldables, where on top of their enhanced product competitiveness, we applied the Galaxy AI experience tailored to the form-factor,” he stated, adding the devices have significantly improved core performance including durability, battery life and camera compared with early models.

However, he said the growth rate of the mass segment is expected to slow due to channel inventory build-up resulting from “excessive selling” during the first half by some vendors, as well as shrinking sales and marketing activities caused by rising material costs.

Demand for ecosystem products including tablets, smartwatches and smart rings is also forecast to increase.

On a group level, net profit jumped more than five-fold to KRW9.8 trillion, with revenue rising 23.5 per cent to KRW74.1 trillion. The growth was led by its chip business, which increased 94 per cent to KRW28.6 trillion.

The company said rising AI investments by hyperscale customers drove “robust demand” for high-bandwidth memory, along with conventional DRAM and solid-state drive products.

R&D expenses increased 10.9 per cent to KRW8.1 trillion.