Samsung is optimistic about smartphones that rely on artificial intelligence, despite losing the top-selling title

Samsung is optimistic about smartphones that rely on artificial intelligence, despite losing the top-selling title

Jung Yeon-ji/AFP/Getty Images

Samsung building in Seoul.


Hong Kong
CNN

Samsung reported its fourth straight quarter of profit decline on Wednesday, ending a dismal year that also saw it lose its crown as the world’s largest smartphone maker.

The South Korean technology giant reported a 35% drop in profits on Wednesday, a sign of how demand for consumer devices and the chips they power continues to slow.

The company said its operating profit fell to 2.8 trillion won (about $2.1 billion) in the December quarter, compared to Worth 4.3 trillion won ($3.5 billion) A year ago, and roughly in line with its earnings forecast published earlier this month.

Despite this, Samsung is optimistic about the return of demand for mobile devices this year.

The company told investors that it expects the smartphone market to rebound in 2024, especially with the introduction of new products, such as AI-powered smartphones, which aim to “stimulate improved demand.”

Samsung, which has also long been the world’s leading smartphone seller, was overtaken by Apple (AAPL) in the fourth quarter, typically a peak time for retailers due to the year-end holiday shopping season.

According to market research firm IDC, the iPhone maker captured 20.1% of the global market share in 2023, slightly higher than Samsung’s share of 19.4%.

The South Korean company admitted to a “decline in smartphone sales” during the fourth quarter, although it noted a rise in demand for high-end smartphones compared to the previous three months. She said tablet sales also jumped as customers were tempted by the launch of the new products.

Samsung It is battling headwinds on many fronts. Following historic supply shortages during Covid, demand for semiconductors has fallen over the past year as consumer demand for electronics remains weak due to global economic uncertainty. This led to huge losses for Samsung, the world’s largest memory chip manufacturer.

On Wednesday, the company reported a loss of 14.9 trillion won (about $11.2 billion) for its hardware solutions unit, which includes its memory chip business, for 2023, compared with a profit of 23.8 trillion won (about $17.8 billion) the previous year.

But the market is expected to gradually recover this year “despite various potential obstacles, including interest rate policies and geopolitical issues,” Samsung said in a statement on Wednesday.

The company added that it was able to charge higher prices for memory chips in the fourth quarter compared to the previous quarter, which indicates a “slight improvement in performance.”

But Samsung warned that it will continue to face challenges. “As continued macroeconomic uncertainty is expected to impact the near-term business environment, the company expects earnings in the first half of 2024 to show moderate improvement, with a more significant improvement expected in the second half of the year.” A year,” she said.

Samsung shares fell by 1.6%. In Seoul on Wednesday.

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