Samsung Electronics has a big phone launch this week, but before that happens, let’s check in on the company’s last quarter. Following the trend of the industry as a whole, Samsung’s earnings seem like a disaster.
For Q4 2022, the company’s revenue—down to 70.5 trillion won ($57.3 billion), or an 8 percent drop from Q4 2021—doesn’t look too bad. Q4 profits plummeted 69 percent year over year, though, down to 4.3 trillion Korean won, or $3.5 billion. That’s an eight-year low, going back to Q3 2014,
Samsung Electronics makes just about every electronic device and every part you’d find in one of those devices—phones, tablets, TVs, laptops, memory chips, SoCs, displays, camera sensors, and batteries—so the company’s earnings will always go the way the general economy goes.
“The business environment deteriorated significantly in the fourth quarter due to weak demand amid a global economic slowdown,” Samsung said. “Earnings at the Memory Business decreased sharply as prices fell and customers continued to adjust inventory. The System LSI Business [the Exynos division] also saw a decline in earnings as sales of key products were weighed down by inventory adjustments in the industry.”
Besides memory, Samsung also flagged smartphone demand as a declining business, a downturn that hit both the company’s self-branded Galaxy phone division and the display division, which provides displays for most smartphones.
It’s not all bad news for Samsung. Despite the crushing Q4, the company managed to escape 2022 with record-high revenue. The foundry business posted record revenue for Q4, and TV sales were up.
Samsung’s press release also mentions the Galaxy S23 launch this Wednesday, but we’re not sure that will help Samsung. According to rumors, nothing much is changing about the devices this year. The S23 lineup is nearly identical to the S22, just with updated specs.
Several reports say Samsung is raising prices in some regions, which could make Samsung’s 2023 even tougher. One example from Spain sees prices rising 100 euro ($108) across the board, with the base model S23 starting at 959 euro ($1,042) and the S23 Ultra starting at 1,409 euro ($1,530). The phone division’s logic of “Low profits? Raise prices!” may not help as smartphone sales fall due to the economy and consumers keeping phones longer than ever.
“For 2023, Samsung expects the impacts of the economic downturn to continue for the time being,” the company says. “However, analysis of smartphone purchase patterns suggests that demand will continue to polarize between premium and low-priced phones.”