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Update 2-Samsung’s latest Galaxy S smartphones are a test of brand strength in a weak market

(Adds comments from Samsung CEO Roh from the news feed)

Written by Joyce Lee and Jane Lanhi Lee

SEOUL/SAN FRANCISCO (Reuters) – Samsung Electronics Co. on Wednesday unveiled its latest premium smartphone with a focus on its powerful cameras, in a test of its brand’s strength as the mobile market goes through an unprecedented downturn.

Analysts said the Galaxy S23 series of smartphones, with its faster cameras and chips than its predecessor, may still face weak demand as consumers spend less amid rising inflation in the faltering global economy.

Acknowledging this challenge, Samsung’s head of mobile experience, or MX Business, told reporters in a post-event briefing that there has been a “notable shift in the premium segment” in developing and emerging markets. “We intend to focus on the premium segment in developed markets as well as some of the countries where we are seeing strong growth,” he said.

The smartphone maker showcased the S23 Ultra’s performance at Samsung’s Unpacked event in San Francisco with outtakes from two films, “Behold” by Ridley Scott, director of “Gladiator” and “The Martian,” and “Faith” by South Korean director Na Hong-jin. using a Galaxy smartphone.

It’s Samsung’s first 200MP camera sensor, and the series uses Qualcomm Inc’s Snapdragon 8 Gen 2 processor. Qualcomm said that with the S23 series, 100% of the processors used will be from Qualcomm.

At the event, executives from Samsung, Qualcomm, and Alphabet Inc gathered on the stage to highlight their partnership in the XR space, which includes virtual reality and augmented reality.

The three have worked together in the XR space for about a decade, said Anshel Sag, an analyst at Moor Insights & Strategy, but this time a restart of the partnership comes as Apple Inc is expected to launch its own mixed reality headset this year.

“I think it’s designed to give both Samsung and Google a little more credibility in the XR space, because they’ve been completely absent from the hardware side for quite some time,” said Sage.

In the US, the base Galaxy S23 will start at $799 and two versions with higher specs, the S23 Plus and S23 Ultra, will start at $999 and $1,199, respectively. Samsung has kept prices at the same level as last year’s model despite the rise in component costs.

However, global smartphone shipments showed the largest decline ever in a single quarter in the October-December period, when they fell 18.3% from a year earlier at 300.3 million units, according to data released by research firm IDC last month. The numbers cast doubt on expectations of a modest recovery in the mobile phone market this year.

In this challenging environment, analysts said Samsung’s mobile strategy will focus on profitability with premium offerings, including the S series and foldable.

“Samsung can’t focus on volume expansion anymore,” said Liz Lee, associate director at research firm Counterpoint.

“It should boldly simplify low- and mid-range products, which are the parts of the market that Chinese competitors have captured the most.”

Samsung said on Tuesday that the decline in sales of its mid-range and mid-range smartphones in the fourth quarter was larger than expected. (Reporting by Joyce Lee; Editing by Jonathan Otis and Christopher Cushing)