Catalyst Needed for Samsung Smartphone Business

The market is paying attention to foldable phones and 5G smartphones as a wild card to recover Samsung Electronics’ poor performance.

Samsung Electronics is seeking to revitalize its sluggish smartphone business by introducing 5G phones and foldable phones at the right time.

The company's IT & Mobile Communications (IM) Division recorded the lowest result in six quarters in the third quarter. It posted 24.91 trillion won (US$21.84 billion) in sales and 2.22 trillion won (US$1.95 billion) in operating profit in the third quarter. The sales and operating profit plunged 10 percent and 32.5 percent, respectively, compared to a year earlier. The Q3 operating profit was the lowest after 2.07 trillion won (US$1.81 billion) recorded in the first quarter of last year when the battery explosion of the Galaxy Note 7 led to the discontinuation of the model.

The IM Division is expected to continuously show poor performance for a while even after the release of its flagship Galaxy Note 9, as Chinese smartphone producers continue to sell various low-end models.

The company is accordingly pinning hopes on next-generation 5G smartphones and foldable phones. 

Foldable phones will be outlined concretely in November. Samsung Electronics is forecast to unveil its user interface for foldable smartphones at the Samsung Developer Conference (SDC) to be held in San Francisco on Nov. 7 and 8. As foldable phones are a new form factor that has never existed so far, how to gain a positive response from the market is the key to success.

Samsung Electronics is also expected to speed up development of 5G smartphones, which are scheduled to be launched in the first half of next year. 

Samsung Electronics can include a 5G smartphone model in the Galaxy S10 lineup to be released in the first half of next year. Bloomberg recently reported, “Samsung Electronics is preparing to launch a premium smartphone that supports 5G for the first time in the industry. The company is currently in talks with Verizon to release its Galaxy S10 in the US with a 5G wireless chipset.”

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