Samsung expects its quarterly profit to fall some 96% in the first 3 months of this year, as sales dropped and demand slowed for the world's biggest maker of televisions, tablets and smartphones. Samsung's plan is to cut its chip production, an ironic shift in strategy after global supply chains battled a chip shortage for much of last year.
Volume vs. value
One bright spot came from sales of its new Galaxy S23 phone series, which jumped 50% on its predecessor. That will help Samsung cling onto its crown as the largest smartphone producer — a title it's duelled over since 2012, fighting off fierce competition from Apple, Nokia and the ever-growing list of low-cost Chinese producers like Xiaomi and Huawei.
Though Samsung typically sells more phones, it is still Apple that’s extracting the most from its customers. Estimates from Counterpoint Research show that Apple collected a whopping 85% of the industry’s operating profit last year, everyone else, Samsung included, split the remaining 15%.
