Samsung’s profits went through the roof in Q2 2020, but smartphones didn’t do very well

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The coronavirus pandemic has made 2020 by far the most challenging year in history for the vast majority of the world’s smartphone vendors, but while Samsung can’t be happy about losing the top spot in Q2 global shipments to Huawei, the latest overall financial results posted by the Korea-based tech giant are actually pretty remarkable.

Believe it or not, the company managed to boost its operating profit compared to both Q1 2020 and Q2 2019 despite also reporting a year-on-year and quarter-on-quarter drop in consolidated revenue. Basically, that means Samsung sold less stuff at significantly higher prices, improving its bottom line during a very difficult time for the global economy.
We’re not talking marginal profit hikes either, as the KRW 8.15 trillion (USD 6.8 billion) gain recorded between April and June 2020 is 26 and 23 percent higher than what the company added to its treasury at the end of 2020’s first and 2019’s second quarter respectively.

That’s an incredible achievement Samsung attributes primarily to its still-thriving memory business, as well as a one-off gain generated by the display panel division. But the Galaxy smartphone portfolio was also single-handedly responsible for a KRW 1.95 trillion (USD 1.6 billion) profit during Q2 2020, up from 1.56 trillion won in Q2 2019.

While far from mind-blowing, the latest result registered by Samsung’s mobile division highlights the company’s ability to defy a pandemic and a global demand decline and still make plenty of money off a Galaxy S20 family that proved nowhere near as popular as the S10 and S9 lineups of past years. 

Unsurprisingly, smartphone revenue took a pretty big hit from both Q2 2019 and Q1 2020, while the division’s profits also declined compared to the first three months of this year. But Samsung expects its “stronger product mix” and the gradual recovery of the “overall mobile market” to improve this somewhat disappointing number during the second half of the year.

Then again, “uncertainties related to COVID-19” may well persist for the next six months, making it impossible to accurately predict how the Galaxy Note 20 duo and a “new foldable phone”, aka the Galaxy Z Fold 2 5G, will do at the global box-office compared to the S20 trio, as well as intensifying competition from the likes of the iPhone 12 roster.

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