South Korea’s Samsung Electronics Co. is hoping demand for high-end devices will drive double-digit growth in sales of its Galaxy line of phones, and it may need to rely on the Chinese market, despite many signs that the global smartphone market is likely to continue to perform sluggishly in 2023.
Samsung, the world’s largest smartphone maker, recently warned that the smartphone downturn could continue throughout 2023. The company expects to outpace its peers by focusing on high-quality components while accelerating expansion in countries such as China that are lagging behind Apple in terms of market share.
In 2022, global smartphone shipments saw their biggest decline in 10 years, but the high-end electronics market dominated by Apple and Samsung fared better during the downturn. On Wednesday, Samsung unveiled a new version of the Galaxy S23, which comes closest to the iPhone’s performance, with a better camera and longer battery life.
We expect challenges to continue this year, but we are on track for another year of double-digit growth,” said Tae-Won Roh, president of Samsung’s mobile business, in an interview before the launch. Even with these challenges, we have expanded our market share in 2022 and will maintain this trend because it is our priority.”
To attract consumers, Samsung has not raised the price of the Galaxy S23, despite rising material costs and a major camera upgrade. However, there is one big variable in achieving these goals, and that is the Chinese market.
China’s smartphone market continues to shrink in 2022, and the timing of the recovery remains uncertain. Meanwhile, Samsung’s share of the Chinese market has fallen to less than 1 percent in recent years. However, according to Lu, Samsung has made significant progress in terms of the high-end smartphone market share.
Samsung is now developing a new strategy centered on high-end devices to prepare for an eventual comeback.
In China, we are building a solid foundation to deliver what Chinese customers really want,” Lu said. Our strategy is to focus on high-end smartphones, and we are already starting to make some progress. We are gradually laying the groundwork for an upturn in the market.”
For Samsung, smartphones are one of its most important businesses, and the company is counting on using mobile devices to connect to a broader ecosystem of services, appliances, and content.
Overall, Samsung was able to expand its share of the global smartphone segment, Lu said. While sales of Chinese smartphone makers plummeted last year, Samsung’s market share rose from 20 percent in 2021 to 21.6 percent in 2022, according to market researcher IDC.
Samsung is currently working on a mixed-reality device called the XR. While Apple will launch its own VR/AR headset later this year, Samsung is working on an as-yet-unannounced project with Alphabet’s Google and Qualcomm.
An analyst at market research firm Canalys said, “Going into 2023, Apple and Samsung will be better positioned to deal with continued uncertainty, thanks to their dominant position in the premium market.” He added that Samsung is also boosting profitability by strengthening its high-end product lineup and adding products such as foldable models.