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A Samsung building in Seoul.
Samsung on Wednesday announced its fourth consecutive quarter of declining profits, capping a dismal year in which it also lost its crown as the world’s top smartphone maker.
The South Korean tech giant posted a 35% drop in profit on Wednesday, in a sign of how demand for consumer devices and the chips that power them remains sluggish.
The company said its operating profit fell to 2.8 trillion won (nearly $2.1 billion) in the December quarter. compared with 4.3 trillion won (3.5 billion dollars) past yearand more or less in line with his profit forecast shared earlier this month.
Despite this, Samsung is optimistic about a resurgence in demand for mobile devices this year.
The company told investors it expects the smartphone market to recover in 2024, particularly with the launch of new products, such as AI-powered smartphones, which will “drive an improvement in demand.”
Samsung, which has also long been the world leader in smartphone sales, Was overcome by Apple (AAPL) in the fourth quarter, typically a peak time for retailers due to the end-of-year holiday shopping season.
According market research company IDCThe iPhone maker had 20.1% of the global market share in 2023, just above Samsung’s 19.4%.
The South Korean firm acknowledged “lower smartphone sales” during the fourth quarter, although it noted an uptick in demand for high-end smartphones compared to the previous three months. Tablet sales also increased as customers were attracted by new product launches, he said.
Samsung is fighting headwinds on numerous fronts. After a historic supply shortage During Covid, demand for semiconductors has fallen over the past year as consumer demand for electronics remains weak due to global economic uncertainty. That’s huge losses for Samsung, the world’s largest memory chip manufacturer.
On Wednesday, the signing aware a loss of 14.9 trillion won (about $11.2 billion) for its device solutions unit, which includes the memory chip business, by 2023, compared with a profit of 23.8 trillion won (17,800 million dollars) the previous year.
This year, however, the market is expected to gradually recover, “despite several potential obstacles, including interest rate policies and geopolitical issues,” Samsung said in a statement. statement Wednesday.
The company managed to achieve higher prices for memory chips in the fourth quarter compared to the previous quarter, showing a slight “improved performance,” he added.
However, Samsung warned that it would continue to face challenges. “As current macroeconomic uncertainties are expected to impact the business environment in the near term, the company expects earnings in the first half of 2024 to show moderate improvement, with more significant improvement expected in the second half.” of the year. year,” he said.
Samsung shares fell 1.6% in Seoul on Wednesday.