Samsung Electronics' MX (Mobile Experience) and Network business unit, responsible for its smartphone operations, recorded its first quarterly operating loss since inception due to rising costs driven by a sharp increase in memory prices. Although sales grew thanks to strong performance of the Galaxy S26 series, profitability deteriorated.
According to Samsung Electronics' second-quarter 2026 results announced on the 30th, the MX and Network business unit reported revenue of 33.2 trillion won and an operating loss of 700 billion won. Revenue increased by 13.7% compared to the same period last year (29.2 trillion won). Meanwhile, operating profit turned from a surplus of 3.1 trillion won in the same quarter last year and 2.8 trillion won in the previous quarter into a loss, marking the first quarterly deficit for the unit.
Samsung Electronics explained that profitability worsened as rising memory prices due to expanded AI (artificial intelligence) investments increased component cost burdens. However, strong sales of the Galaxy S26 series and entry-level A series, along with an increase in the average selling price (ASP) of smartphones, drove continued revenue growth. The company also noted it maintained its position as the global smartphone market leader even during the typically slow second quarter when flagship new product effects tend to fade, which was evaluated as a positive achievement.
The network business saw performance improvements compared to both the same period last year and the previous quarter, driven by expansion of overseas operations.
Samsung Electronics stated, "We plan to restore profitability by increasing the sales mix of premium products such as the Galaxy S26 Ultra and Galaxy Z Fold8 and Flip8 in the second half of the year." It added, "We will optimize product composition (mix) and distribution channel operations while also expanding the AI device ecosystem by launching 'Intelligent Eyewear,' an AI smart glasses product, within this year."
in TECH
