Samsung cited “expanded sales of flagship products such as the Galaxy S7 and Galaxy S7 Edge” as driving profitability in its mobile unit, while also noting the contribution of “a streamlined mid to low-end smartphone lineup”.

Operating profit in the IT & Mobile Communications unit increased by 56.5 per cent to KRW4.32 trillion ($3.8 billion), on revenue which increased 1.9 per cent to KRW26.6 trillion.

Sales of the premium S7 Edge also benefitted profitability.

In the quarter, the company shipped around 90 million handsets, with its smartphone mix in the “mid-80s per cent”. Average selling price was in the “$210 range”.

The company also cited an improvement in its networks business, “due to increased LTE investment of major carriers in the second quarter”.

Looking forward, Samsung is looking to a smartphones sales increase under stronger seasonal demand, with “the launch of [a] new model” – the company has an event scheduled for next week, at which it is expected to unveil its latest Note-line phablet.

“The release of a new large-screen flagship smartphone will help to maintain solid sales of high-end smartphones led by the Galaxy S7 and S7 Edge,” it said.

The company is also looking to focus on expanding smartphone sales including this year’s Galaxy A and Galaxy J series, and the debut of the Galaxy C series exclusively for the China market.

However, it also said that “market competition is expected to strengthen as other companies release new mobile devices”. This, and the new product launch, is likely to see an increase in marketing spend.

While handset volume is likely to be stable, the company is anticipating a greater share of smartphones in the mix, also boosting ASPs.

Group results
On a group level, Samsung reported a net profit of KRW5.85 trillion, up 1.7 per cent year-on-year, on revenue up 4.9 per cent to KRW50.9 trillion.

Its Consumer Electronics division achieved “significant earnings growth”, led by sales of premium 4K televisions, refrigerators, washing machines and air conditioners. However, in the next quarter this unit is likely to see weaker seasonality.

But the component business saw a drop in profit, due to “average selling price declines in the industry”. Looking ahead, it expects an earnings increase in this unit due to sales growth in high value-added products and stable supply and demand conditions.