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Samsung's phones are almost as profitable as its chips now, with flagships shining brightest of all

By Adrian Diaconescu

Published: Oct 31, 2024, 6:33 AM

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Samsung Android

Samsung Galaxy S24, S24 Plus, and S24 Ultra

Samsung is out with yet another bittersweet financial report, generating higher total revenues but lower profit scores in Q3 2024 compared to the previous quarter. If we extend the comparison to the same July-September timeframe of last year, the multifaceted tech giant can certainly be pleased with its great progress across the board, jumping from a quarterly revenue of KRW 67.40 trillion and an operating profit of under 2.5 trillion won to over 79 trillion won earned and a net gain of KRW 9.18 trillion.

Those July-September numbers for this year roughly equate to 57.4 billion US dollars and $6.6 billion, and although Samsung's profit in Q2 2024 exceeded 10 trillion won, the company can definitely be happy with its latest overall financial performance, as well as the individual performances of all of its divisions and departments.

Samsung's foldable and S24 series sales are expected to remain "solid"

The "MX and Networks" Business, which is the larger division that encapsulates Samsung's smartphones, yielded a profit score of KRW 2.82 trillion on a revenue of KRW 30.52 trillion in Q3 2024. How solid are those results? Extremely solid if you compare them with the KRW 27.38 trillion revenue and KRW 2.23 trillion profit of Q2 2024, but less so if you look at the company's Q3 2023 report.

Back then, Samsung somehow managed to squeeze 3.3 trillion won in profits from mobile devices generating just 30 trillion won in consolidated revenue. That year-on-year drop from KRW 3.3 trillion to KRW 2.82 trillion may have something to do with the recently reported underperformance of the Galaxy Z Fold 6 and Z Flip 6, as well as more aggressive and frequent Galaxy S24 series discounts compared to S23 deals this time last year.

The Z Fold 6 and S24 Ultra are likely two of Samsung's most popular phones right now. | Image Credit -- PhoneArena

Of course, Samsung is not confirming or denying my suspicion, choosing to focus on the "sequential" improvements of its mobile division and anticipating further growth in both sales and profits during Q4 2024 (compared to Q3 2024). "Various sales promotions" around the holidays are expected to contribute to another "solid" quarter for "AI smartphones", with flagship models looking at an especially solid "double-digit" boost in shipments.

It feels important to note that Samsung is carefully avoiding hyperbolic language to both describe the recent sales results of its smartphones and predict their future performance, which strongly suggests modest growth (at best) is on the horizon.

Galaxy tablets, smartwatches, and wireless earbuds, meanwhile, are forecasted to improve their sales figures and profitability in Q4 2024 and 2025, but Samsung is keeping things even vaguer regarding the expected growth rates of these product categories.

Memory chips are down, mobile displays are up

Universally considered for a very long time (and with very good reason) Samsung's fattest cash cow, the DS (Device Solutions) division is... a slightly humbler moneymaker now, yielding a profit of KRW 3.86 trillion ($2.8 billion) between July and September of this year.

That's massively down from the 6.45 trillion won profit reported in Q2 2024 for Samsung's memory chip-making business, but it's obviously also a huge improvement over the KRW 3.75 trillion losses of Q3 2023. Looking ahead to the final quarter of the year, Samsung expects the general "demand trends experienced in the previous quarter to continue", which means that mobile chip sales could stay "relatively soft", possibly leading the company's DS division to a rare lower profit number than the MX department.

Both the iPhone 16 Pro Max and Galaxy S24 Ultra use Samsung-made screens. | Image Credit -- PhoneArena

The Samsung Display Corporation (SDC) division, meanwhile, managed to improve its revenue and profit figures compared to Q2 2024 thanks primarily to the "flagship product launches of major mobile customers." That probably means Apple, which unfortunately also means that Samsung's mobile display business may not be able to sustain this growth trend for very long.

All in all, Samsung is not ready to make any firm predictions as far as its total revenue and profit scores for Q4 2024 and 2025 are concerned, with everything from memory chips to smartphones, tablets, smartwatches, and displays facing macroeconomic uncertainties that could end up hurting the tech giant's bottom line to a degree that's essentially impossible to assess at the moment.

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Adrian, a mobile technology enthusiast since the Nokia 3310 era, has been a dynamic presence in the tech journalism field, contributing to Android Authority, Digital Trends, and Pocketnow before joining PhoneArena in 2018. His expertise spans across various platforms, with a particular fondness for the diversity of the Android ecosystem. Despite the challenges of balancing full-time parenthood with his work, Adrian's passion for tech trends, running, and movies keeps him energized. His commitment to mid-range smartphones has led to an eclectic collection of devices, saved from personal bankruptcy by his preference for 'adequate' over 'overpriced'.