Samsung’s AI Smartphone Strategy Drives Surge in Mobile Profits and Closes Gap With Apple

Samsung Electronics Reports Strong Growth in Mobile Division Driven by AI Smartphones

Samsung Electronics delivered impressive second-quarter results in its mobile experience (MX) division, fueled by the growing success of AI-enabled smartphones. By extending AI features from its flagship Galaxy S series to the more affordable Galaxy A series, Samsung has effectively expanded its AI adoption strategy across different market segments. This move contributed to narrowing the market share gap with Apple in the highly competitive U.S. market.

Mobile Division Sees Significant Profit Increase Backed by AI Smartphone Demand

In the second quarter, Samsung’s MX and Network (NW) divisions combined posted an operating profit of 3.1 trillion won, marking a 39% increase year-over-year from 2.23 trillion won. With the company's total operating profit at 4.7 trillion won for the same period, the mobile business clearly played a pivotal role in driving overall profitability. Sales in these divisions also rose by 6.6% to 28.5 trillion won compared to last year.

The surge in profit and sales is largely attributed to Samsung’s strategy of popularizing AI smartphones. Both premium models like the Galaxy S25 and mid-range Galaxy A series saw strong demand. The introduction of AI capabilities to the Galaxy A series, starting with a few models last year and expanding further this year, has made AI technology accessible at various price points ranging from approximately 400,000 to 700,000 won.

Pricing Strategy Supports AI Smartphone Expansion

Samsung’s pricing approach has helped accelerate the adoption of AI smartphones. Despite equipping all Galaxy S25 variants with a pricier Qualcomm AP chip, Samsung kept prices steady to encourage broader use of AI features. Industry analysts also believe the company slightly lowered prices for mid-to-low-end models, as the average selling price (ASP) for Samsung smartphones dipped by $9 compared to the previous year.

This pricing balance, combined with increased demand, resulted in a notable 39% jump in operating profit. According to Counterpoint Research, Samsung ranked first globally in smartphone shipments during Q2, with an 8 percentage point increase in market share year-over-year.

AI Popularization Strategy Gains Traction in U.S. and Europe

Samsung plans to maintain strong smartphone sales momentum in the second half of the year by doubling down on AI integration. The company aims to equip over 400 million devices with Galaxy AI this year, up from 200 million last year. There are indications that AI features will also extend to entry-level models soon.

The U.S. market has seen the most significant impact from this strategy. Samsung's smartphone market share in the U.S. climbed to 31%, an 8 percentage point increase from last year, with shipments rising 38% to 8.3 million units in Q2. This growth has narrowed the market share gap with Apple from 33 percentage points to 11 points. Apple’s delayed release of its AI-enhanced feature, "Apple Intelligence Siri," may have contributed to Samsung’s gains.

Europe has also responded positively. For example, the Galaxy A56, launched in Western Europe in March, increased sales by 12% within just 50 days compared to its predecessor, the Galaxy A55.

What Marketers Can Learn from Samsung’s Approach

• AI as a Differentiator: Integrating AI features across both premium and affordable models helps broaden appeal and drives volume growth.
• Strategic Pricing: Maintaining or slightly lowering prices during product upgrades can stimulate demand while protecting profitability.
• Focus on Key Markets: Prioritizing AI adoption in regions like the U.S. and Europe, where competition is intense, can yield significant market share gains.

Samsung’s results highlight the value of combining technology innovation with accessible pricing and targeted market strategies. For marketing professionals interested in AI trends and product positioning, understanding Samsung’s “AI popularization” approach offers practical insights into driving growth in competitive consumer tech markets.

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