Is Samsung management being overly cautious? On April 18, THE Korea Economic Daily revealed that the conglomerate would henceforth impose a six-day week on its main managers. “Considering that the performance of our main units (…) did not meet expectations in 2023, we introduce [cette mesure] in order to inject a feeling of crisis and that all efforts be made to overcome it”explained to the daily a manager of the group, while its profit fell by 30% in 2023 (60 billion dollars, or more than 56 billion euros).
The Seoul group also justifies this decision by an environment that is not very favorable to its activity: depreciation of the Korean won, rising interest rates, increasing oil prices, uncertainties linked to the American presidential election in November, conflicts in Ukraine and in the Middle-East…
However, in the forecast it published on April 5, Samsung estimates that its profit in the first quarter should amount to 4.9 billion dollars, an amount ten times higher than that achieved in the same period in 2023. If these good results were to be confirmed during the official publication of quarterly results on April 30, they would be the best recorded in a year and a half.
Since the start of the year, several lights have turned green for the group. While at the end of 2023, Apple had taken away the title of world’s leading smartphone manufacturer – which had not happened since 2010 – the Korean returned to the lead in the first quarter. With 60 million units sold (-0.7% compared to the first quarter of 2023), it is well ahead of its competitor (50 million, -9.6%), according to a study by the IDC firm published on April 15. This good performance is partly linked to the successful launch, in January, of its latest phones, the Galaxy S24. New products are due to be revealed in early July.
Artificial intelligence revolution
All these elements lead Nabila Popal, research director at IDC, to say that “Samsung is in a much better position today than it has been in many quarters.” There remain two shadows on the picture: the rapid progress of Xiaomi, now the leading pursuer of Samsung (40 million units, + 33.8%) on the one hand, the strong return of Huawei on the Chinese market, on the other go.
But Samsung, with its wide range of high-end products – notably its folding phones and now a new generation of products boosted with artificial intelligence (real-time translation, image improvement, facilitated search) – has the advantage of retaining an average selling price of its devices that none of its competitors, apart from Apple, can hope to achieve in the medium term.
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