What you need to know
- Samsung boasts about the popularity of its Galaxy S23 series as worldwide sales of the device surpass its predecessor.
- The company also announced guidance for its Q1 2023 financial earnings.
- Samsung’s guidance suggests a massive drop in profit and a decrease in sales revenue.
It’s only been a few months since Samsung launched the Galaxy S23 series, but the company is not shy about boasting about its sales successes with the flagship. However, Samsung’s quarterly earnings suggest some major struggles for the company.
Samsung posted its earnings guidance (opens in new tab) for the first quarter of 2023 on Thursday, and it didn’t paint a pretty picture for the company. The company reported an estimated 63 trillion Korean won in sales, which is down roughly 19% from the 77.78 trillion won it raked in during the same quarter last year.
However, the most concerning part of the guidance is the operating profit, which came in at an estimated 600 billion won ($450 million USD). That represents a more than 95% plunge in operating profit compared to Q1 2022 and is also the company’s lowest recorded profit in 14 years.
Like many others, Samsung is still dealing with the effects of the ongoing semiconductor shortage, the biggest contributor to its poor guidance. Other chipmakers like Qualcomm have highlighted increased inventory levels which have slowed the demand from customers for new chips.
As a result of the plunge in profits and to combat the ongoing economic struggles affecting chip sales, Samsung has stated that it will reduce its semiconductor output. “We are lowering the production of memory chips by a meaningful level, especially that of products with supply secured,” the company said in a statement (via Reuters).
However, this comes just as the company boasted improved sales of its latest flagship smartphone in global markets, which likely helped the company stay afloat during the quarter. Sales of the Galaxy S23 series in Europe, India, the Middle East, and Latin America are as much as 1.7 times higher than those of the Galaxy S22 during the same period (via Yonhap News Agency).
It’s not too surprising that Samsung’s flagship sales would be on the uptick. The company introduced the trio with the latest Snapdragon 8 Gen 2 for Galaxy, a powerful and more efficient SoC that powers the phones globally. Given the flack Samsung has gotten over its underperforming Exynos chips, fans are apparently flocking to get their hands on a Snapdragon-powered Galaxy.
And like previous years, the top-end model seems to be the most popular, with the Galaxy S23 Ultra making up 60% of sales.
Samsung is expected to fully release its quarterly earnings report for the January-March period later this month.