According to the Korean media The Elec News, Samsung’s business support department asked the TV and smartphone division to improve the performance of the relevant countermeasures, as a response to the main rival LG Electronics offensive.
▲ Image source: Samsung Electronics’ official website
Samsung’s 1Q 2023 results were sluggish, with revenue of 63.7 trillion won (currently about RMB 335.062 billion) and operating profit of 640 billion won (currently about RMB 210 million), a 96% year-on-year plunge in operating profit. Samsung’s device experience division, which is responsible for consumer electronics and mobile products such as cell phones, made an operating profit of about 4.2 trillion won (currently about RMB 22.092 billion), a decrease of 350 billion won (currently about RMB 263 million) year on year. Among them, the operating profit of the home appliance division, including TVs, was about 190 billion won (currently about RMB 473 million), a sharp drop of nearly 80% year-on-year.
Samsung Electronics main competitor, LG’s Home Entertainment Business Unit, posted an operating profit of about KRW 200.3 billion (currently about RMB 157.8 million), while the Home Appliance and Air Conditioning Business Unit posted an operating profit of about KRW 1.02 trillion (currently about RMB 5.365 billion) and a consolidated operating profit of nearly KRW 1.2 trillion (currently about RMB 6.312 billion). Sony Electronics reported an operating profit of 179.5 billion yen (currently about RMB 9.137 billion). Samsung’s TV and home appliance division delivered an operating profit of 190 billion won (currently about RMB 473 million), which also means it was overtaken by old rivals Sony and LG. As a result, Samsung’s business support working group recently held an internal meeting and asked the TV and smartphone divisions to take all-out measures to improve their business situation.
The strategy to improve Samsung’s business includes accelerating the pace of product releases, etc. Samsung is considering launching new products such as Galaxy Z Flip5 / Z Fold5 early, expecting to take advantage of the new release effect to seize the window period before the launch of the new iPhone. In addition, the news that Samsung advanced to July 26 instead of Samsung’s traditional release in mid-August, the effect of new products to boost performance early reflected in the third quarter earnings, but the actual effect remains to be further observed.
