Sales growth was strongest at its semiconductor division, up 6 percent to KRW 12.00 trillion, while mobile remained the largest division, up 2 percent to KRW 26.07 trillion, driven by demand for the new Galaxy S7 and S7 Edge. Consumer electronics sales also rose 3 percent, to KRW 11.55 trillion on demand for UHD and large-screen TVs, and the division showed a sharp improvement in operating profit, to KRW 1.03 trillion from KRW 0.21 trillion a year ago. Operating profit at the mobile division jumped to KRW 4.32 trillion from KRW 2.76 trillion a year ago, led by a bigger share of high-end devices and streamlining of the low-end portfolio. Profits from semiconductors were lower year-on-year.
Looking ahead, Samsung said it expects market demand for smartphones to increase in the second half of 2016 due to strong seasonality, which should also help its semiconductor activities. It aims to further improve profitability among its own handsets, by strengthening the high-end line-up and maintaining solid profitability of mid to low-end products. Samsung plans a press conference 02 August, where it is expected to unveil the new Galaxy Note. It also plans to expand global sales of the A/J series and further streamline the smartphone range, but warned margins may come under pressure compared to Q2 due to increased marketing spend.
In consumer electronics, seasonality is expected weaker, and the company will continue to focus on the high end of the market in order to support profitability.
