He said that all these overlapping crises—including the economic recession, geopolitical tension, supply chain risks, and climate change—have made the market super uncertain. He added that how Samsung gets through these multiple crises will determine their future success or failure.
Samsung’s financial forecast
On the same day, Samsung forecasted that the company’s operating profit for Q4 2022 will drop by a whopping 69% to 4.3 trillion won ($3.4 billion), way below what was expected. Sales for the October-December period are also expected to go down 8.6% compared to last year. All of this is because the global economic downturn is making people less interested in buying products, and high exchange and interest rates are not helping.
Samsung Co-CEO and Vice-Chairman Han Jong-Hee
In times of hardship, the company is sticking to its fundamental values, Han states, and for future growth engines, Samsung is looking into robots and the metaverse. Samsung recently invested 59 billion won ($46 million) in a South Korean robot maker, Rainbow Robotics. As for the metaverse, Samsung is still serious about it, even though the hype around it seems to have died down (just look at what’s happening with Meta). Han believes that technology goes where it’s needed most, and the metaverse is no exception. He said that companies are still working on developing the technology, and more details will come out in time.
New strategy, tailored for the Chinese market
During the keynote, Han also mentioned that Samsung is trying to boost its presence in the Chinese market, where they currently only hold 2% of the market share in smartphone sales. He said they’ve identified the problem, which was that their strategy was mostly focused on the US and Europe, but they’re now trying to tailor products and services specifically for Chinese consumers.
What does it mean for Samsung’s smartphone business?
If the aforementioned makes you fearful about Galaxy phones and their future, don’t be. In times of recession, the first measures a company would take are related to cost savings in terms of reducing overhead expenses, such as rent, utilities, and employee salaries.
Even though the official statement from Han Jong-Hee sounds alarming, Samsung probably won’t take any drastic measures such as discontinuing phone models (we still miss the Galaxy Note, though) or delaying production. Especially with the new strategy to try and expand on the Chinese market. What do you think about it? Do you feel the crisis looming already, or companies are being too cautious?
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