Samsung aims to break through the smartphone slump

Eye on China:
A Samsung executive said the company expects challenges to continue this year, but added that it will achieve double-digit growth again.

Samsung Electronics Co. is counting on demand for premium devices to drive double-digit sales growth in Galaxy feature phones this year, despite signs that the global market may contract for the second year in a row.

The world’s largest smartphone maker, which warned this week that the record smartphone slump could continue well into this year, expects to outperform the industry by focusing on higher-quality components while gradually expanding into countries such as China, where it has been overtaken by Apple. Inc.

Global smartphone shipments fell the most in about a decade last year, but the high-end gadget market dominated by Apple and Samsung has held up better during the downturn.

Photo: Reuters

On Wednesday, Samsung removed the latest iteration of its closest iPhone competitor, the S23.

“We expect continued challenges this year, but we will achieve double-digit growth again,” TM Roh, President of Samsung’s mobile business, said in an interview before the unveiling. “Even in the midst of these challenges, we were able to increase our market share in 2022 and we will maintain this trend as our main priority.”

Hoping to entice consumers, Samsung has kept prices for the S23 stable despite higher material costs and major camera improvements.

However, there is one big unknown that is China. While the country remains one of the world’s largest buyers of memory chips, the smartphone market shrank last year when COVID-19 restrictions hit the economy, and a recovery remains uncertain.

At the same time, Samsung’s share of the Chinese market has fallen to less than 1 percent in the past few years.

However, it made great strides in premium smartphone market share last year, Roh said.

Samsung is now devising a new strategy centered around its premium devices, and is preparing for its eventual bounce back. For example, a foldable model designed specifically for Chinese consumers called the W series is being launched.

“In China, we are building our core fundamentals to deliver what Chinese customers really want,” said Roh. “Our strategy is focused on premium smartphones and we are starting to make small progress. We are building a foundation to transform the market, step by step.”

Smartphones rank among the most important for the South Korean company, which relies on mobile devices to deliver a broader ecosystem of services, devices and content.

Overall, Roh said, Samsung has expanded its share in the global smartphone arena.