Samsung’s smartphone biz is a bright spot in dismal Q3 2019

Samsung says it will continue to foster its network business in the U.S. and Japan. (Samsung)

Samsung Electronics reported that its total revenue in the third quarter 2019 decreased about 5% year-over-year to $53 billion. And its operating profit for the three months ending in September fell a whopping 56% compared to Q3 2018. The losses largely stemmed from the company’s memory chip business. 

On the brighter side, Samsung saw strong sales of smartphones and OLED screens. The mobile unit posted a 17% year-over-year increase in revenue to $24.1 billion.

In April, Samsung launched the world's first 5G smartphone the S10 5G. And it also made the news in 2019, albeit not always favorably, for its Galaxy Fold phones. The $2,000 phone was first rolled out commercially in April. But after reports that the phones broke within a few days of use, Samsung pulled them from the market. They were re-introduced in September.

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During the most recent quarter, the company released its flagship Galaxy Note 10 in August. “Our smartphone shipment and revenue grew thanks to solid sales of Galaxy Note 10 and A Series,” said Jong-Min Lee from Samsung’s Mobile Communications Business, on the company's Q3 2019 earnings call, according to a Seeking Alpha transcript.

However, the company is tempering expectations for mobile phones for the fourth quarter. While it expects an uptick in phone sales for the holidays, that will be offset by holiday marketing costs.

For its mobile device guidance for 2020, Lee said, “Demand for 5G smartphones is expected to increase as commercialization of 5G accelerates. Based on our experience with launching 5G smartphones, we will actively respond to the needs of the market and our customers by widening our 5G lineup.”

The company plans to expand its sales of premium smartphones and enhance its mix of mass market smartphones by focusing on medium to high-end models within the segment.

South Korea has been a leader in 5G, and as a South Korean company, Samsung Electronics has been a major participant in that. Lee said, “For the network business, we will remain active in the nationwide expansion of 5G coverage and foster growth of our 5G business overseas, including in the U.S. and Japan.”

RELATED: Verizon first to deploy Samsung’s new 5G NR Access Unit

Last week at Mobile World Congress Americas in Los Angeles, Samsung Networks unveiled a 3GPP 5G NR-compliant integrated radio Access Unit (AU) for millimeter wave spectrum. The AU supports 28 GHz spectrum, and Verizon is confirmed as the first operator that will use the unit in 5G deployments.